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UPDATE 4-Tesla rival Lucid Motors to go public in $24-bln mega SPAC deal

·2 min read

(Recasts lede with pro-forma equity value figure, adds details,background)

Feb 22 (Reuters) - Luxury electric vehicle maker LucidMotors on Monday agreed to go public by merging with blank-checkfirm Churchill Capital IV Corp in a deal that valuedthe combined company at a pro-forma equity value of $24billion.

Lucid, run by an ex-Tesla engineer, is the latest firm totap the initial public offering market, with investors rushinginto the EV sector, spurred by the rise of Tesla Incand with emissions regulations toughening in Europe andelsewhere.

The deal, which has a transaction equity value of $11.75billion, includes a $2.1 billion cash contribution from CCIV anda PIPE (private investment in public equity) investment of 2.5billion from investors.

Other prominent players in the sector went public throughmergers with so-called special purpose acquisition companies(SPACs) last year. While some deals such as Fisker havedelivered well, others such as Nikola have given up short-termgains.

Reuters was first to report last week that Michael Klein hadlaunched a financing effort to back the Lucid deal.

The publicly traded shares of CCIV fell nearly a third to$40.35 in volatile extended trading, giving the merged company amarket capitalization of about $64 billion. By comparison,General Motors Co is worth about $76 billion.

Lucid said it is on track to start production and deliveriesin North America in the second half of this year with Lucid Air,its first luxury sedan. It had previously said it planned tostart its deliveries in spring of 2021.

Lucid, which plans to build vehicles at its factory inArizona, aims to deliver 20,000 vehicles in 2022 and 251,000 in2026 by adding other models like an electric sport utilityvehicle.

With a starting price of $77,400, the sedan is slated to bethe first to achieve a 500-mile (805 km) driving range.

After Lucid priced its sedan, Tesla chief Elon Muskannounced a price cut to its flagship Model S sedan. "Thegauntlet has been thrown down!" he tweeted.

CCIV, which is backed by Wall Street dealmaker and formerCitigroup banker Michael Klein, and new private investors aregetting shares at different prices, with the newer privateinvestors paying a premium.

The deal with CCIV includes a private investment of $2.5billion from Saudi Arabia's Public Investment Fund, fundsmanaged by BlackRock and others.(Reporting by Niket Nishant, Shariq Khan and Sohini Podder inBengaluru and Greg Roumeliotis in New York; Additional reportingby Hyunjoo Jin in San Francisco and Aishwarya Nair in Bengaluru;Writing by Subrat Patnaik; Editing by Stephen Coates and GerryDoyle)