To date, all of the newly public blank check companies have initially traded on either the OTC Bulletin Board or on the AMEX. Nasdaq is now talking to the SEC about listing them and the NYSE also has the issue under consideration.
Exchanges Vie to List 'Blank Check' Firms
By LYNN COWAN
February 22, 2008; Page C3
The American Stock Exchange could soon face more competition from other U.S. exchanges for listings of "blank check" companies, an area that it now dominates.
Yesterday, Nasdaq Stock Market Inc. said it will seek permission from the Securities and Exchange Commission to list blank-check companies, also known as special-purpose acquisition companies, or SPACs. Until now, the smaller Amex has been the primary listing site for these firms, which begin life as empty shells that raise money through initial public offerings to purchase operating businesses. Nasdaq officials said they expect to receive SEC permission by the end of this quarter.
Meanwhile, NYSE Euronext, which last month announced plans to buy the Amex, also is in the preliminary stages of talks with the SEC to list SPACs on its New York Stock Exchange.
Three years ago, the Amex was the only exchange interested in providing a home for SPACs, which were once viewed as vehicles ripe for fraud. But a number of structural changes adopted by SPACs slowly brought legitimacy to these firms, with brand-name management such as Dallas billionaire Thomas Hicks and major investment banks such as Citigroup Inc. and Merrill Lynch & Co. underwriting the deals.
Last year, SPACs accounted for nearly a quarter of all IPOs in the U.S., according to Dealogic, and the Amex was the go-to listing location for nearly all of them; 50 SPACs raised a combined $10 billion there.
Nasdaq said yesterday it would adopt special listing criteria that would create more stringent standards for SPACs than on any other market. The standards it laid out include a requirement that IPO proceeds be deposited in a special escrow account, that SPACs complete an acquisition of a business within 36 months and that shareholders must approve an acquisition.
NYSE declined to comment on its proposed rules.
While the rules proposed by Nasdaq differ from those on the Amex, they are unlikely to spark a change in the way SPACs are structured. The industry standard already is for SPACs to put IPO proceeds in a trust and give shareholders control over acquisition approval; many deals currently require a deal to be completed within 24 months, not 36, of the listing. Amex rules, however, don't set a time limit.
Write to Lynn Cowan at lynn.cowan@dowjones.com
online.wsj.com |
