Airbnb reportedly turns down Bill Ackman's SPAC proposal

Airbnb, an online rental marketplace, had planned to go public via a direct listing during early 2020 but the pandemic's catastrophic impact on the travel industry quickly halted those plans. As a result of the coronavirus disruption, Airbnb raised $2bn in emergency debt financing, let go of about 25% of its workforce and reportedly lost 90% of its bookings. However, as holiday rentals recently started to bounce back, it was announced and confirmed in August that Airbnb resumed its IPO plans and confidentially filed for an initial public offering.

Bill Ackman's record-breaking $4bn SPAC, Pershing Square Tontine Holdings, aims to complete a reverse merger with 'mature unicorns', like Airbnb. In a Bloomberg TV interview in July:

"We would certainly take a look at a company like Airbnb. I've always admired the business. I've admired its economic characteristics" – Bill Ackman

Another reason Ackman may have sought after Airbnb is because of its derailed valuation of $18bn, down from its 2017 $31bn valuation during funding round. It is evidently an opportune time period for SPACs due to the extreme market volatility as a consequence of the upcoming elections and continued uncertainty surrounding the pandemic.

"Uncertainty is the enemy of the IPO and the friend of a $5bn SPAC with the largest amount of committed capital" – Bill Ackman

Bloomberg reported on Thursday (September 3) that Ackman approached Airbnb and held early-stage discussions but did not reach the point of due diligence because Airbnb supposedly preferred the traditional route to going public.

Whilst this deal did not see the light of day (at least for now), it gives a solid hint of the kind of company Ackman is looking for.

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Related: check out M&A Insight's post "SPACs are Booming"