Polestar SPAC merger poised to raise $850 million on Wall Street

Polestar and Gores Guggenheim, the special purpose acquisition company planning to merge with EV maker, said Tuesday that they expect the deal to raise at least $850 million.

The companies foresee the merger closing on Thursday, subject to Gores Guggenheim stockholder approval.

If that happens, Gores Guggenheim's Nasdaq listing under the ticket symbol GGPI will switch to the combined companies' new symbol, PSNY, and start trading in New York on Friday.

A bell-ringing ceremony in New York is planned for June 28 as Sweden has a national holiday on Friday.

Polestar first announced plans to list as a public company on the Nasdaq with Gores Guggenheim last September.

The companies noted Tuesday that the preliminary redemption elections are expected to reach a maximum of 25 percent. The lower the number the better for redemptions, as it shows Gores Guggenheim's shareholders back the merger, according to a source close to the deal.

“To have limited redemptions in this challenging macro environment is an incredible feat and speaks to the strength of Polestar’s brand -- as well as the high conviction our investors have in Polestar’s potential," Gores Guggenheim Chairman Alec Gores said in the release.

SPACs so far this year are averaging an 83 percent redemption rate. Only three of the 42 reverse mergers completed in 2022 have had a redemption rate below 50 percent, according to the source.

"We are proud of the momentum Polestar has built over the past several months and we look forward to the expected closing of our business combination this week,” Gores added.

The momentum includes Polestar, which is a subsidiary of Volvo Cars, closing a deal in April with rental giant Hertz to supply up to 65,000 battery-powered vehicles in Europe and the U.S. The five-year pact should represent more than $3 billion of potential revenue for the EV startup, a source told Automotive News.

Polestar CEO Thomas Ingenlath called the pending listing "a milestone moment for the company," which is expected to boost sales to 290,000 by 2025 from 29,000 last year and reach financial break-even in 2023.