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Technology Stocks : Blank Check IPOs (SPACS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (1700)	4/4/2008 11:26:45 AM
From: Joe S Pack	Read Replies (2) \| Respond to of 3862

Is it good or bad for the public share holders when insiders own less percentage? -J6P Liberty Lane is the first Goldman, Sachs SPAC. The insiders will only own 7.5% of the deal. I suspect that we will be seeing some adjustments to the other SPACS that are currently in registration. Goldman Tries SPACs, With a Twist March 25, 2008, 12:32 pm After sitting out one of the hottest underwriting trends in years, Goldman Sachs has jumped into SPACs. But in true Goldman style, the folks at 85 Broad are putting their own spin on the idea, rather than imitating their Wall Street peers. Liberty Lane Acquisition filed Tuesday to go public with Goldman as the sole underwriter, marking the first time in recent years that Goldman has underwritten a special-purpose acquisition company. SPACs, which raise money to buy a company that isn’t even identified yet, have become hugely popular, providing a nice stream of underwriting fees for the likes of Citigroup, Credit Suisse and Deutsche Bank. Last year, initial public offerings from SPACs raised a combined $12 billion. So far this year, they have raised $3.4 billion, according to Dealogic. However, certain aspects of SPACs have raised questions, which DealBook described in a column earlier this year. In its SPAC debut, Goldman seems to be trying to address at least some those concerns. Most SPACs allocate 20 percent of the company for their founders. Some consider that an extremely generous set-aside, and it generally comes at the expense of a SPAC’s public shareholders, including someone who might consider selling his or her business to the SPAC in exchange for equity. But Liberty Lane is taking a different tack: It will earmark just 7.5 percent of its equity for management, a group that includes the company’s chairman, Paul M. Montrone. Mr. Montrone was chief executive of Fisher Scientific until it merged with Thermo Electornics in 2006; he has since founded Liberty Lane Partners, a private equity firm. This slimmer stake will cause less dilution for Liberty Lane’s other shareholders, the company said in its prospectus. It will also give management a stronger incentive, as compared to traditional SPACs, to create value by finding a deal that will raise the firm’s stock price. Another difference in the Liberty Lane SPAC: Some of the warrants given to Liberty’s founders will have a higher-than-normal exercise price. This is another added incentive to create new value, the prospectus said. One aspect of the Liberty Lane SPAC is fairly standard, however. It comes with a 24-month window in which it must do a deal or be forced to liquidate. This is at the high end of the traditional timeframe of 18 months to 24 months. DealBook had heard talk about the possibility for a longer timeframe on Goldman’s SPACs, which could ease the pressure on management to do a deal — even a bad one — to meet the deadline. dealbook.blogs.nytimes.com