(Yahoo Finance) – Lucid Motors and Churchill Capital IV (CCIV) confirmed a merger deal to take the California-based EV company public. Shares of Churchill Capital tanked as much as 27% after the news was announced on Monday evening. The stock’s after-hours performance is a reversal from previous sessions when it rallied over reports of nearing a deal.
The transaction values Lucid at an initial pro-forma equity value of approximately $24 billion at the PIPE offer price of $15.00 per share and will provide Lucid with approximately $4.4 billion in cash (assuming no existing CCIV shares are redeemed for cash at closing).
Speculation over a deal has been circulating for more than a month. In mid-February shares of Churchill Capital IV, led by investment banker Michael Klein, surged 30% following a report of a nearing agreement. On Monday the stock gained double digit percentages after a Bloomberg report said an agreement could come as soon as Tuesday.
The electric vehicle maker is backed by Saudi Arabia’s sovereign wealth fund. A deal with Churchill Capital IV is one of highest profile EV SPAC agreements since Nikola (NKLA) and Fisker (FSR) debuted publicly last year.
Lucid Motors has been closely watched since it is competing in the electric luxury sedan space. The company’s CEO and CTO Peter Rawlinson was the chief engineer at Tesla (TSLA) for the model S prior to joining Lucid Motors in 2013.
Lucid Motors placed its first US production factory in Casa Grande, Arizona. The company aims to meet production goals for of its most expensive vehicle, the Air Dream Edition this year.
“I think it’s really important that we start at a high-end position as a true luxury brand. I’m a great believer that the first product defines the brand in way Tesla model S defined Tesla as a brand,” Rawlinson told Yahoo Finance in October of last year.
In an email to Yahoo Finance on Monday prior to a deal announcement, Lucid’s official statement read “Lucid Motors has always been clear about its intent to go public at some point in order to accelerate the adoption and global availability of Lucid’s exclusive electric vehicle and sustainability technologies…Currently, our focus continues to be on bringing Lucid Air to production in Spring of this year, with the strong support of key investors and our partners at the Public Investment Fund.”
Lucid also confirmed it will be opening a showroom in New York City’s trendy meat packing district, just blocks away from Tesla’s showroom.