May 01, 2018
Partner John Emanoilidis has spoken with Lexpert about what a special purpose acquisition company (SPAC) can provide as compensation for holding its investors capital in a trust when a transaction is underway.
The article—which also features on page 22 of the May 2018 edition print edition—discusses the evolution of SPACs “as legal advisors experiment with creative uses for the investment vehicle.”
A SPAC is a type of fund that allows public stock market investment in private equity transactions.
The Lexpert article discusses how the first SPAC ended up being a failure as the company targeting an acquisition “announced that it lacked sufficient cash to complete the transaction because an overwhelming number of shareholders opted to redeem their holdings in the SPAC.”
John told Lexpert that because investors can have their capital held in a trust account for upwards of two years during a transaction, a SPAC usually offers some sort of compensation for its shareholders.
“One share and a warrant or half warrant that’s exercisable at a premium,” John told Lexpert.
You can learn more about Torys’ M&A work by heading to its practice page.