Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
Lucid Motors Inc. is approaching an agreement to be made public through a merger with a blank check company started by investment banker Michael Klein that could be announced early next week, according to people familiar with the subject.
The combined entity will be worth up to $ 15 billion, people said, asking that it not be identified because the matter is private.
The special-purpose acquisition company has been in talks to raise between $ 1 billion and $ 1.5 billion in funding from institutional investors to support the transaction, people added. The valuation and amount of additional financing could still change depending on investor demand.
Two people said an agreement for the electric vehicle manufacturer could be announced on Tuesday. Conversations are ongoing, but could still be undone
Klein, a former rain maker at Citigroup Inc., will use Churchill Capital Corp IV, its largest SPAC, which has raised more than $ 2 billion, for the transaction, people say. Lucid is backed by Saudi Arabia’s sovereign wealth fund.
Photographer: Andrew Harrer / Bloomberg
A representative from Lucid Motors declined to comment. A Klein representative could not be contacted immediately for comment.
Churchill Capital Corp IV has risen more than fivefold since Bloomberg News for the first time reported the talks last month.
Reuters reported last week that an agreement could be reached as early as this month.
Klein played in prominent role in guiding the kingdom’s investments, serving as an advisor to its Public Investment Fund. Among other deals, he advised on Saudi Aramco’s initial public offering.
For more: Lucid with Saudi support in talks for the nearby electric car factory Gidda
Several electric vehicle manufacturers have made deals with SPAC as startups try to pool and raise money to compete with the industry leader Tesla Inc. Lucid would be one of the most established electric vehicle companies to do this route.
Lucid would also be one of the largest SPAC deals announced since the rush began, probably only surpassed by the merger of United Wholesale Mortgage LLC with Gores Holdings IV Inc., valued at about $ 16 billion.
SPAC parade
SPACs have also attracted a large number of prominent investors. Michael Dell, activist investor Paul Singer, Facebook Inc. co-founder Eduardo Saverin and former Xerox Corp. chief Ursula Burns joined the parade of blank checks on Friday, with at least 13 these companies applying to US IPOs to raise more than $ 4.5. billion.
SPACs have come to dominate IPOs this year, accounting for 63% of the nearly $ 77 billion raised on U.S. stock markets, according to data collected by Bloomberg. Including Friday’s newcomers, 146 SPACs they have filed since Jan. 1 are expecting IPOs to add $ 40 billion to that total, according to the data.
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Lucid aims for market luxury and its CEO, Peter Rawlinson, was previously Tesla’s chief engineer in the Model S sedan. Saudi Arabia’s sovereign wealth fund has invested more than $ 1 billion in the company.
The company was founded in 2007 under the name of Atieva and spent years devoting itself more to battery technology than to pursuing the development of a luxury car. It pivoted in 2016, changed its name to Lucid and began work on what would become its main model, the Air.
Lucid plans to begin deliveries of a $ 169,000 electric sedan to U.S. customers in the second quarter. The Air EV, which the company says can do more than 500 miles on a single load, will be built at a factory in Arizona. It plans to offer more affordable versions of the Air from 2022 and will later build a battery-powered electric SUV.
– With the assistance of Kiel Porter