Lucid
- Churchill Capital Corp IV is reportedly in talks with Lucid Motors to go public.
- SPAC has seen its share price jump more than 300% since rumors of the merger became public on January 11.
- If the merger takes place, Lucid will be one of more than 130 companies to go public via SPAC this year.
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Churchill Capital Corp IV rose 33% on Tuesday after a Reuters report suggested the company is close to an agreement to go public with electric vehicle maker Lucid Motors for an appraisal of about $ 12 billion.
The SPAC backed by Michael Klein is reportedly in talks with investors to raise between $ 1 and $ 1.5 billion for the transaction by selling shares in a PIPE. These funds would be an additional boost to the $ 2 billion Churchill Capital IV raised with its initial public offering in July.
According to Reuters, Lucid and Michael Klein reached an agreement on the main terms of the deal, which could be announced later this month.
Churchill Capital IV declined to comment on the deal, and Lucid Motors did not immediately respond to Reuters’ request for comment. Both companies did not immediately respond to Insider’s request for comment.
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If the deal is approved, it will be another successful SPAC merger for former Citigroup executive Michael Klein, who raised another $ 1.6 billion for his sixth and seventh SPACs on Monday.
Rumors of a possible deal between Michael Klein SPAC Churchill Capital IV and Lucid began on January 11, when Bloomberg reported that the two companies were in negotiations for a possible merger.
Subsequently, Churchill Capital’s shares jumped more than 300%, as investors continue to focus on any news in the hot EV market.
Lucid Motors was founded in 2007 as a battery company called Atieva by former Tesla executive Bernard Tse and entrepreneur Sam Weng.
Since then, the company has transitioned to a full-fledged EV manufacturer that focuses on luxury offerings. Lucid’s first EV, the Lucid Air, will target the Tesla Model S with its base price of $ 77,400, a range of 517 miles and a quarter mile time of 9.9 seconds.
Lucid also has a factory in Casa Grande, Arizona, which will produce 400,000 vehicles a year, according to the company.
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Churchill’s move to merge with Lucid Motors follows a long line of new EV players for public markets in recent years.
From Chinese electric vehicle manufacturer Nio to Lordstown Motors of Ohio, electric vehicle manufacturers are growing and SPACs are often their preferred method of entering public markets. More than 130 companies went public through a merger or acquisition of SPAC in 2021, in what some are calling the SPAC boom.
While some of these SPAC entries were worthwhile for investors, others were not as productive.
Rivals Lucid Nikola and Fisker went public through mergers with SPACs in 2020, and while Fisker posted strong gains, many of Nikola’s gains have been erased because EV competitors are facing growing competition.
Still, CCIV’s shares responded positively to the news, trading up 32.44%, at $ 52.95, as of 3:56 pm ET on Tuesday.