Churchill IV (CCIV) Stocks Dip As Lucid Finally Confirms SPAC Merger

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Summary

  • Luxury electric vehicle (EV) maker Lucid Motors finally confirmed the rumors around its potential merger with blank check company Churchill Capital IV (NASDAQ:CCIV, CCIV:US) on Monday.
  • Churchill IV stocks sank by about 44 per cent in premarket hours on Tuesday morning (9.45AM EST).
  • Lucid revealed that it will be merging with the SPAC at a transaction equity value of US$ 11.75 billion.


After weeks of speculation around its potential merger with blank check company Churchill Capital IV (NASDAQ:CCIV, CCIV:US), luxury electric vehicle (EV) maker Lucid Motors finally confirmed the rumors on Monday, February 22.

Reports about Lucid heading for a SPAC merger to get publicly listed has been floating since January. Following the rumors, Churchill Capital IV saw its stocks gallop by 473 per cent this year and by over 150 per cent in February to date.

In the light of the official confirmation of their merger, however, Churchill IV stocks sank by about 44 per cent in premarket hours on Tuesday morning (9.45AM EST).

Let’s take a closer peek at the details of the merger deal between Lucid Motors and SPAC Churchill Capital IV.

 

Lucid Motors-Churchill Capital IV Merger – Key Highlights


Lucid revealed that it will be merging with the veteran financier Michael Klein-owned special acquisition company (SPAC) at a transaction equity value of US$ 11.75 billion.

The deal will see a total investment of about US$ 4.6 billion, which will include a cash contribution of US$ 2.1 billion by Churchill and a private investment in public equity (PIPE) financing worth US$ 2.5 billion.

The PIPE has been priced at US$ 15 apiece, which is a premium of 50 per cent to the blank check company’s net asset value.

The transaction, Lucid said, values it at an initial pro-forma equity value of about US$ 24 billion.

©Kalkine Group 2021

 

The EV maker pointed that its transaction with Churchill includes the largest SPAC-related PIPE financing ever.

The deal is likely to be completed by the second quarter of this year. Once it is through, Lucid CEO and CTO Peter Rawlinson is set continue to the new combined entity.

The reverse merger deal between Lucid and Churchill IV is expected to bring in the biggest investment the EV manufacturer has seen since the US$ 1 billion funding from Saudi Arabia’s Public Investment Fund in 2018.

Lucid Motors, often dubbed as Tesla’s major rival, joins the long line of big EV players which went the SPAC way to go public in the past one year.

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