NYSE Proposes the Listing of SPACs
March 24, 2008
On March 6, 2008, the NYSE Euronext proposed a rule change to permit the listing of special purpose acquisition companies (SPACs) on the NYSE, following a recent, similar move by The NASDAQ Stock Market to permit the listing of SPACs on The NASDAQ Stock Market. The NYSE noted that recent changes in deal structure, sponsorship and scale prompted this policy change. SPACs have already successfully listed on the NYSE Euronext’s European markets, such as the Amsterdam market.
SPACs function as capital-raising entities for initial public offerings (IPOs), through which the raised capital is later used to pay for mergers and acquisitions. As proposed, the rule would require SPACs to return the raised capital to investors if the capital was not spent during a certain time period.
In addition, the proposed rule requires that SPACs:
- have at least $250 million in total market capitalization at the time of initial listing
- have at least $200 million in public float at the time of initial listing
- place a minimum of 90 percent of IPO proceeds in a trust
- undertake a business combination within three years, based upon the favorable vote of a majority of the publicly-held shares, subject to a right of dissenting shareholders to request redemption
http://www.nyse.com/press/1204801796472.html
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