- Churchill Capital Corp IV is reportedly in talks with Lucid Motors to take the company public.
- The SPAC has seen its share price jump over 300% since rumors of the merger first became public on Jan 11.
- If the merger goes through, Lucid will be one of the over 130 companies to go public via SPAC this year.
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Churchill Capital Corp IV soared as much as 33% on Tuesday after a report from Reuters suggested the company is close to a deal to take electrive vehicle maker Lucid Motors public at a valuation of around $12 billion.
The Michael Klein-backed SPAC 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 from its IPO in July.
According to Reuters, Lucid and Michael Klein have agreed on key terms of the deal, which could be announced as early as 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.
If the deal goes through, it would be yet another successful SPAC merger for the former Citigroup executive Michael Klein who raised another $1.6 billion for his sixth and seventh SPACs on Monday.
Rumors of a potential deal between the Michael Klein SPAC Churchill Capital IV and Lucid started back on Jan. 11 when Bloomberg first reported the two companies were in talks for a potential merger.
Subsequently, shares of Churchill Capital have jumped more than 300% as investors continue to target any news in the red 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 take aim at the Tesla Model S with its base price of $77,400, a 517 miles of range, and a 9.9-second quarter-mile time.
Lucid also boasts a Casa Grande, Arizona factory that will eventually produce 400,000 vehicles annually, according to the company.
Churchill’s move to merge with Lucid Motors follows a long line of new EV entrants to the public markets over the past few years.
From Chinese EV manufacturer Nio to the Ohio-based Lordstown Motors, EV makers are booming, and SPACs are often their method of choice for entering public markets. More than 130 companies have now gone public via a SPAC merger or buyout in 2021 in what some are calling a SPAC boom.
While some of these SPAC entries have paid off for investors, others haven’t been as fruitful.
Lucid rivals Nikola and Fisker both went public via mergers with SPACs in 2020, and while Fisker has posted strong gains, much of Nikola’s gains have been erased as EV entrants are facing increasing competition.
Still, shares of CCIV responded positively to the news, trading up 32.44%, at $52.95, as of 3:56PM ET on Tuesday.