SPACs

Buyout barons like the sound of a blank check

2 Sep 2015

David Bonderman’s TPG and Alec Gores’ eponymous firm are the latest to jump on the shell-company bandwagon. A cutthroat M&A scene and the success enjoyed by the likes of Martin Franklin have amplified the siren call. Not all acquisition nous is necessarily the same, however.

Travel deal treads new path for shell companies

16 Jul 2015

Blank-check vehicles have often brought financial misadventure. The latest quest for success is the acquisition of Lindblad, a National Geographic-linked operator of cruises to the Galapagos and Antarctica. New terms and investors suggest so-called SPACs are worth revisiting.

High-powered cash shell gets taste for frozen food

20 Apr 2015

A vehicle backed by conglomerate-builder Martin Franklin and hedgie Noam Gottesman is buying Iglo for 2.6 bln euros. Seller Permira gets about 8.5 times 2014 EBITDA for the maker of Birds Eye fish fingers. It looks like a frugal base from which to build a big food group.

Makeovers don’t make SPACs much prettier

4 May 2011

Blankcheck acquisition vehicles are back with a new look. They're no longer confined to specific sectors and investors can get their money back if they don't like a proposed deal. But SPACs also have been booted off the big exchanges. All told, these investments still look ugly.

GLG deal further undermines blank checks

17 May 2010

The hedge fund firm got its NYSE listing when Freedom, a blank check company or SPAC, bought a stake back in 2007. Then, Freedom's stock traded at $10plus. Now, Man Group is buying GLG for $4.50 a share. Sure, initial holders got a pop but long term, it's another SPAC flop.

Apollo’s Spac deal is unlikely to reward everyone

17 Jun 2008

The buyout firm is selling Hughes Telematics to a blank check company in return for a stake. Hughes has tiny sales and aggressive growth assumptions. The deal will probably be approved. But it shows why investors who come into Spacs after they buy something should be careful.

Goldman’s failure to mainstream Spacs shows their limits

29 May 2008

The investment bank withdrew a Spac IPO because it couldn t drum up demand. That s odd given the deal had an unusually shareholderfriendly structure. But Goldman didn t peddle the deal to the traditional Spac crowd. Its failure to find broader demand shows the limits of Spacs.

Spacs shouldn’t be considered a bear market hedge

4 Mar 2008

Issuers say investors are snapping up shares of blank cheque IPOs even as they shun regular IPOs because there is little downside. But that s only true if the manager doesn t buy anything. If he does and he has every incentive to do so investors can easily lose out.

Perelman latest to test Spac investor gullibility

7 Dec 2007

The Revlon boss has filed for a blankcheck IPO. Despite his iffy track record, investors will probably give him the $500m he wants. After all, two relatively obscure financiers just raised the largest Spac ever. Investors should be more skeptical.

Shell companies attract the attention of Wall Street

14 Feb 2006

Special purpose acquisition vehicles are becoming a popular way to raise acquisition finance for smaller companies. However, their increasing size and rising leverage indicate speculative excess.