NYSE Pursues SPAC Listing
Another exchange wants to list special purpose acquisition companies.
March 6, 2008
The New York Stock Exchange said Thursday that it has decided to let special purpose acquisition companies list on its exchange, pending the approval of the Securities and Exchange Commission.
The move wasn’t particularly surprising since the Nasdaq also recently sought the regulator’s approval to list the investment vehicles, commonly referred to as SPACs. For the NYSE, which studied the acquisition company market over an unspecified period of time, its decision allowing the new listings was based on “recent changes in sponsorship, scale and deal structure,” according to Noreen Culhane, executive vice president of the NYSE’s global corporate client group.
"Acquisition companies provide opportunities for investors and issuers previously available to professional investors only,” Culhane said in a statement.
The NYSE’s reference to “changes in sponsorship” presumably refers to the launching of SPACs by high-profile financial executives like Bruce Wasserstein, Joseph Perella, Thomas Hicks, Nelson Peltz and Ronald Perelman over the last several months. The participation of the savvy financial executives in the SPAC arena marks a sea change for the business that had traditionally drawn former corporate executives seeking to make industry-specific acquisitions. Another key difference between acquisition companies of the last few years and the new crop launched by investors is that the latter tend to be set up to acquire companies operating in a broad range of industries.
Both the NYSE and Nasdaq are late to the acquisition company party. The American Stock Exchange listed its first acquisition company two years ago when Community Bankers Acquisition went public. The AMEX has garnered the lion’s share of listings, though some SPAC operators have chosen to go public on London’s AIM, while the Euronext just completed its second listing last month when Liberty International Acquisition Co. raised $877.6 million.
The NYSE’s requirements for listing on the exchange stipulate that acquisition companies must have a market capitalization of at least $250 million and deposit minimum IPO proceeds of 90%. Like the Nasdaq’s recent proposal, the NYSE is requiring its listed acquisition companies consummate an acquisition within three years of going public and get the majority of their shareholders to approve purchases.
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