SPACs splash the cash to salvage deals as market unravels

  • 📰 globeandmail
  • ⏱ Reading Time:
  • 60 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 27%
  • Publisher: 92%

Business News News

Business Business Latest News,Business Business Headlines

They’re turning to costly new tactics to keep investors from jumping ship

SPACs are turning to costly new tactics to keep investors from jumping ship as market confidence wanes in the once red-hot alternative to IPOs.

In money terms, almost $9.5 million worth of mergers have been canned this year, according to Dealogic data. The approaches being employed by SPACs include offering bonus stock to investors who choose not to redeem shares. “With a high number of SPACs still seeking targets and the skepticism due to the pullback in the market, it has become harder to persuade target companies to want to engage with SPACs and have the related management distraction,” said Atif Azher, partner at law firm Simpson Thacher & Bartlett LLP.

“The best way to maximize participation by SPAC shareholders is to bring to market a highly profitable company with exciting growth prospects at an attractive valuation. The bonus share reward is just the icing on the cake,” Cohn Robbins co-chairmen Gary D. Cohn and Clifton S. Robbins told Reuters. Some of the fundraising is also done via over-the-counter equity derivative agreements. If investors who buy the shares choose not to redeem them before merger completion, the SPAC agrees to buy back those shares from them at a later date after the merger is safely in the bag.Some investment firms have also stepped in recent months to backstop deals.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 5. in BUSİNESS

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Loblaw Companies buying Lifemark Health Group for $845 million in cashLoblaw Companies Ltd. says it has signed a deal to buy Lifemark Health Group for $845 million in cash. You'll see a lot more of this as Ontario tries to privatize healthcare. This is what's on the ballot in June. Vote wisely. And they will be well placed to start charging thousands of people for LongCovid rehab since our health care system will not be able to handle the burden. And apples are $1.50+ per unit.
Source: CP24 - 🏆 30. / 67 Read more »

Loblaw Companies buying Lifemark Health Group for $845 million in cashLoblaw Companies Ltd. announced a deal Monday to buy Lifemark Health Group for $845 million in cash.
Source: CTVNews - 🏆 1. / 99 Read more »

Struggling Nevada precious metals company lands cash infusion from AMC and mining financier Eric SprottHycroft lands cash infusion from AMC and Eric Sprott
Source: globeandmail - 🏆 5. / 92 Read more »