Photographer: David Paul Morris / Bloomberg
Photographer: David Paul Morris / Bloomberg
According to people familiar with Lucid Motors Inc., an agreement is closer to making a public case through a merger with a blankcheck company started by investment banker Michael Klein.
The people say the joint entity will value as much as $ 15 billion and ask not to be identified because the case is private.
The special-purpose procurement company has negotiated to raise between $ 1 billion and $ 1.5 billion in funding from institutional investors to support the deal, the people added. The valuation and the amount of extra funding may still change based on investor demand.
Two of the people announced an agreement for the manufacturer of electric vehicles on Tuesday. The conversations continue, but can still fall apart.
Klein, a former rainmaker of Citigroup Inc., will use Churchill Capital Corp IV, its largest SPAC, which raised more than $ 2 billion, for the deal. Lucid is backed by Saudi Arabia’s sovereign wealth fund.
Photographer: Andrew Harrer / Bloomberg
A representative of Lucid Motors declined to comment. A representative of Klein could not be immediately reached for comment.
Churchill Capital Corp IV has more than quintupled since Bloomberg News for the first time reported on the talks last month.
Reuters reported last week that an agreement could be reached as early as this month.
Klein played a plays a prominent role in guiding the kingdom’s investments, and serves as an adviser to the Public Investment Fund. Among other things, he gave advice on the Saudi-Aramco initial public offering.
For more: Saudi-backed Lucid in talks for an electric car factory nearby Jeddah
Several electric vehicle manufacturers have entered into transactions with SPACs as start-ups try to raise money and compete with industry leaders Tesla Inc. Lucid would be one of the most established electric vehicle companies that followed this route.
Lucid would also be one of the largest SPAC deals announced since the storm, probably just beaten by the merger of United Wholesale Mortgage LLC with Gores Holdings IV Inc., which is valued at about $ 16 billion.
SPAC Parade
SPACs have also attracted a number of prominent investors. Michael Dell, activist investor Paul Singer, co-founder of Facebook Inc., Eduardo Saverin and Ursula Burns, former Xerox Corp. chief, all took part in the parade with blank checks on Friday, with at least 13 of these companies submitting US stockbrokers has to raise more than $ 4.5. billion.
SPACs dominated IPOs this year and accounted for 63% of the nearly $ 77 billion raised on U.S. wallets, according to data compiled by Bloomberg. Including Friday’s newbies, 146 SPACs filed since January 1 have been waiting on IPOs to add $ 40 billion to the total, the data shows.
Dell, Singer, co-founder of Facebook, who recently joined SPAC Bandwagon
Lucid is targeting the luxury end of the market and its CEO, Peter Rawlinson, was previously Tesla’s chief engineer on 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 Atieva and for years has focused more on battery technology than on the development of a luxury car. It turned around in 2016, changing its name to Lucid and starting work on what would become its main model, the Air.
Lucid plans to begin delivering $ 169,000 electric sedans to U.S. customers in the second quarter. The Air EV, which according to the company can perform more than 500 miles at a single charge, will be built in a factory in Arizona. He plans to offer affordable versions of the Air from 2022 and later build a battery-powered electric sports utility vehicle.
– With help by Kiel Porter