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Technology Stocks : Blank Check IPOs (SPACS)
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From: Glenn Petersen3/2/2006 4:31:17 PM
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SPACs are starting to appear in the UK. This article does not mention the number of SPACs currently trading in the UK, though I vaguely remember reading another article that noted that two were trading and one was in registration.

spac to front

At the end of last year, a new type of company started to appear on Aim. Specialist acquisition vehicles (known affectionately as "spacs'') originated in the US market but now appear to be crossing the pond.

Spacs are similar to large cash shells - they are fully funded acquisition vehicles that provide investors with an immediate exit as soon as an acquisition is made.

The big difference from the UK approach to cash shells is that in the US they raise a large amount of cash first of all, compared to the relatively small amount usually raised in the UK markets. Attracted by the healthy state and lower costs of the UK's junior market, we'll be seeing more Spacs over the course of 2006. In the US, there are 18 such vehicles.

Adam Hart, head of business development at KBC Peel Hunt, said: "The emergence of spacs is a good sign of the increasing internationalisation of the Aim market.

"Investment in these vehicles to date has been largely by US investors and hedge funds.

"However, during 2006 we will see more of these investment vehicles joining the market as foreign investors continue to get more comfortable with investing in Aim stocks.''

Spacs are also subject to tight regulation and are seen as an attractive alternative by investors.

tmcnet.com
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