Pershing Square Tontine Holdings Ltd, the blank check company backed by billionaire investor Bill Ackman, has increased the size of its initial public offering by $1 billion to $4 billion, the largest ever IPO by a special purpose acquisition company.

The firm plans to go public with 200 million units at $20 each, according to a regulatory filing on Monday.

A SPAC uses IPO proceeds and borrowed funds to acquire a company, typically within two years. Investors are not notified in advance which company a SPAC will buy.

Ackman, whose New York-based hedge fund manages more than $10 billion in assets, may ultimately have $7 billion to invest.

In the filing, Ackman said the company will seek to acquire a venture capital-backed firm that he called a "mature unicorn" which has chosen to remain private.

Reuters first reported Ackman's plans in June.

Ackman, best known as an activist shareholder who calls for changes at companies, was also a co-sponsor of Justice Holding Inc, a SPAC which acquired restaurant chain Burger King for $1.4 billion in cash in 2012.

Ackman's latest vehicle will handily beat out former Citigroup Inc executive Michael Klein's Churchill Capital III Corp, which raised $1.1 billion in February, to become the largest ever SPAC.

Churchill Capital late on Sunday agreed to take healthcare payment solutions provider Multiplan Inc public in an $11 billion deal.

Ackman is looking to list the SPAC's shares on the New York Stock Exchange under the symbol "PSTH.U."