Shanghai Century Shanghaied By Its Shareholders

Shanghai Century Acquisition Corporation (AMEX: SHA, SHA.U, SHA.WT), a SPAC that raised $115 million in April 2006, announced that on April 29, 2008 its shareholders rejected its proposed acquisition of Asia Leader Investments Limited (a structured lease finance business in China initially in the banking/financial services infrastructure and automotive industries).

The idea was to expand Asia Leader's industry coverage after the closing to include: alternative energy infrastructure, energy savings infrastructure, healthcare, aviation and telecommunications.

The SPAC will now begin the process of liquidation.

This following the SPAC's botched attempt to acquire Sichuan Kelun Pharmaceuticals Co was scuttled after the transaction was unable to gain approvals from the People's Republic of China.


Click here for the press release

Morgan Joseph SPAC Conference -- Conclusion: Mo Money, Mo Less Problems?

Led by Tina Pappas, A.K.A. the "SPAC Lady", Morgan Joseph held its first annual SPAC conference in New York last week, attracting over 500 participants.

Attendees bemoaned the slowdown, with Richard Heckmann of Heckmann Corp. saying:

"...it seems to me that the SPAC market should be hotter than it is. Tell me a market you can go into where you can't lose money, the worst that can happen is that you'll get your money back."

... and that:

"My advice to a [new] team doing a SPAC is to bring something to the party. It's always about the management, it's always about the team. Money doesn't solve problems, management does..."

Click here for more coverage from Business Wire and TheDeal.com.

Granahan McCourt Acquisition Corporation SPAC Cuts it Close, Qualifying for Acquisition Extension on Last Possible Day

Granahan McCourt Acquisition Corporation, a $90 million SPAC priced in October of 2006, has announced that it has agreed in principle to acquire a target company, but has not yet disclosed the name. The company now has an additional 6 months to complete the transaction. According to the press release:

"Granahan McCourt Acquisition Corporation (AMEX:GHN, GHN.U, GHN.WS) (the “Company”) announced today that it has met the condition under its Fourth Amended and Restated Certificate of Incorporation that permits it until October 24, 2008 to complete an appropriate acquisition meeting the criteria set forth therein. The Company expects to announce a definitive agreement for a business combination shortly."

Click here for the press release

SPAC Filed and Priced Database Now Up-To-Date as of April 23, 2008

Click here to search SPAC pricing, structure, M&A and more for free.

Andrew Murstein Interviewed in the Wall Street Journal About His SPAC, Sports Properties Acquisition Corp

In this April 22, 2008 interview with Stephen Grocer at the Wall Street Journal, Murstein outlines his plan for a $400 million to $1 billion acquisition of a sports-reated entity. He has been meeting with the comissioners of all the major American sports leagues (MLB, NBA, NFL, NASCAR) to vet opportunities.

Murstein notes:

"Teams in several of the leagues have been public before, such as the Boston Celtics and the Cleveland Indians, and their shareholders did very well. Several team owners have also contacted us, so we are talking to many prospects. There are some teams that are just not right for the SPAC, but many in large markets with great fan bases would be perfect. It would be great for fans to be able to buy the stock of those teams and own a piece of their favorite club."

Click here for the article

David Weidner at MarketWatch Predicts the End of "SPAC Fever", Compares SPAC Backlog to Halloween Hangover

David Weidner at MarketWatch has a forward looking analysis of the "companies, people and events" to shape the markets over the next few months, including SPACs:

"SPACs, or special purpose acquisition vehicles or blank check initial public offerings. These private equity companies wrapped up in an initial public offering have fueled the equity underwriting markets, but like a kid eating candy on Halloween, the markets are ready to hurl. There were 70 of these SPACs registered through April 14, according to The Deal. Many existing SPACs are folding because they can't find good companies to buy or they've met their deadline or both. SPACs made up 88% of the IPO backlog through March 25, according to Dealogic. This looks like the end for SPAC fever and who's going to pay the price? Citigroup, of course, the leading underwriter of SPAC deals."

Click here for the article

April SPAC Acquisition Approvals Breathe Some Life Into SPAC M&A

While SPAC investors and sponsors are taking a little breather along with the rest of the IPO market, SPAC M&A continues to move forward. After a fairly rough start to the year, with five SPACs announcing dissolutions, transactions continue to be pushed through.

Here's the April list:

• Global Services Partners Acquisition Corp acquisition of SouthPeak Interactive. GSP has announced that their shareholder vote will take place on April 24, 2008 (Proxy Here)
• Asia Automotive Acquisition Corp acquisition of Hunan TX was approved on April 17, 2008 (Press Release)
• Jaguar Acquisition Corp acquisition of China Cablecom was approved on April 9, 2008 (Press Release)

SPAC Backlog Thickens, We Start Using the Word "Glut"

There are more SPACs on file with the SEC than have priced since early 2007. By our count nearly 100 SPACs, including foreign SPACs filed on a confidential basis, are waiting for market conditions to improve and move through the review process.

According to TheDeal.com:

"[The] large backlog of about 70 registrations has strained the market’s capacity. “There’s too much supply of issuers and just not enough demand,” said a New York investment banker."

We believe that many bankers, management teams and sponsor groups are taking a wait and see attitude these days, as the equity markets are still roiling from the mortgage crisis, depressing acquisition valuations and the ability of hedge funds to deploy capital.

Apex BioVentures to Liquidate, Unable to Complete Dynogen Acquisition Due to "Market Conditions"

Apex Bioventures, a $60,000,000 SPAC that priced its IPO in June 2007 has announced that it is terminating its planned $98,000,000 acquisition of Dynogen Pharmaceuticals.

According to the press release:


"Apex and Dynogen determined that, due to current market conditions, particularly for small capitalization public biotech companies, terminating the merger agreement was in the best interests of both companies and their respective stockholders"

This, on the heels of the spectacular, last minute blow-up of Oracle Healthcare Acquisition Corp's acquisition of Precision Therapeutics earlier this year.


Click here for the press release.

New SPAC Issues Reported to Decline by 10% in 2008, Nascent Industry Cringes

Reuters is reporting that SPACs IPOs are expected to decline by 10% in 2008.

Barry Grossman of Ellenoff Grossman & Schole LLP is quoted as saying:

"The whole IPO market will be down significantly this year ... There are a lot of SPACs in the pipeline right now and there's so much inventory out there that I can see people saying: 'I have enough SPACS in my portfolio right now; let me look around.' But if you have quality management, those deals are still getting done."

We say that projections that the SPAC market will decline by only 10% are naive, at best. SPAC IPOs this year are already down over 55% vs. the same period last year, and aren't showing any signs of recovery, while a stagnant backlog continues to grow. It ain't shaping up to be pretty.

Click here for more.

Ladenburg Thalmann & Co. Begins Issuing Research on SPACs, First Rating Unsurprisingly a "Buy"

According to DealFlowMedia, Ladenburg Thalmann & Co. has begun issuing research on SPACs, initiating with a "Buy" rating on Marathon Acquisition Corp (AMEX: MAQ). SPAC underwriters will take interest as Ladenburg was an underwriter on the Marathon IPO and currently has the company on out on the road trying to convince shareholders to vote for its deal.

As we mentioned in a recent post on Marathon, Michael Gross announced that he would be buying 12-vessel Global Ship Lease (a subsidiary of CMA CGM S.A. of France) for about $1 billion.

Tracking SPACs: The Morgan Joseph Acquisition Company Index (MJACI) Chart Goes Up and Up

Wow, we sure love charts that go up: Morgan Joseph has a Bloomberg-quoted SPAC Index called the MJACI worthy of checking out for those of you who are looking for a holistic view of aggregated, indexed SPAC performance right up until the point that a SPAC buys a business. Morgan Joseph describes their index as follows:

"MJACI is a market capitalization weighted (excluding promote shares and over allotments) index. MJACI adds newly formed public acquisition companies at their initial offer price and removes an existing acquisition company upon consummation of a business combination. In either event, index weightings are linearly rebalanced. The index is set equal to a base of 100 as of January 1, 2005."

Of course, the index fails to take into account plummeting equity values exhibited by most SPACs following the acquisition, but most of you are probably playing arb strategies and getting out prior to the combination anyways on these things, so what do you care?

Find out more here.

Equal Time: Another SPAC Conference to Hit New York City in June

Dealflow Media is sponsoring a SPAC conference on June 5, 2008 at the Hilton Hotel, New York City. Should be a good one with a hole slew of tasty topics, and you save $200 if you sign up by April 18th.

At the conference, they're covering:

• Different Trading Strategies for Units, Common Stock & Warrants
• Understanding the Listing Alternatives: OTC, AIM, AMEX, Euronext and Nasdaq
• Tactics to Avoid Liquidation
• How Regulatory Changes Might Impact Blank Check Offerings
• Practical Valuation when SPACs are in Play
• Management Considerations: What it Takes to Run your Own Deal
• How to Arbitrage SPACs
• The Do’s and Don’ts of Searching for Targets & Tactics to Avoid Liquidation
• Dealing with Liquidity Issues and Positioning for a Shareholder Vote
• Approaches to Special Situations
• SPAC Structuring Alternatives including Trusts, Voting & Banker’s Compensation
• Moving a SPAC's Shareholder Base Away from Hedge Funds
• Data & Statistics: A Comprehensive Tour of the Modern SPAC Marketplace

Click here to register

SPAC Shareholders Get Out The Vote

Proxy solicitors are in for a profitable treat this month and next as seven SPACs have scheduled shareholder votes for reasons ranging from liquidation, changing their corporate charters to approving acquisitions.

Should be a fun couple of months:

• Asia Automotive Acquisition Corp -- April 4, 2008 -- Acquisition of Hunan TX Enterprise
  
• Phoenix India Acquisition Corp. -- April 8, 2008 -- Continue its existence as a shell
• Jaguar Acquisition Corp -- April 9, 2008 -- Acquisition of China Cablecom
• Grubb & Ellis Realty Advisors -- April 14, 2008 -- Liquidation
• Shanghai Century Acquisition Corp. -- April 17, 2008 -- Acquisition of Asia Leader Investments
• Global Services Partners Acquisition Corp. -- April 24, 2008 -- Acquisition of SouthPeak Interactive
• Oracle Healthcare Acquisition Corp. -- May 14, 2008 -- Liquidation

SPAC Rankings: Accounting Firm Beauty Contest

The bean counters have been counted! Here, without further ado, are the top ten SPAC accounting firms on blank check companies that have either gone public or are still in registration since 2004.

Goldstein Galub Kessler and Rothstein Kass trounce their nearest competitor, BDO Seidman, with a combined four times as many deals as BDO. They really ARE the best at auditing a shell company with zero hard assets, no operations, no revenues and $25,000 in the bank. Go CPAs!

Once again, if you don't trust our numbers, get thee to Edgar, dear readers.

Stay tuned for SPAC IPO underwriter rankings next week. We're gonna slice and dice 'em all sorts of ways.