Toronto Stock Exchange Proposes Listing of SPACs

According to an article by Leslie McCallum, the Toronto Stock Exchange (TSX) is proposing to permit the listing of special purpose acquisition corporations.

Overview of SPACs Under Proposed TSX Rules:

• A SPAC must raise IPO proceeds of at least $30 million, with a minimum price per security of $5
• Within three years of the IPO, the SPAC must acquire one or more operating businesses with a combined minimum value of approximately 80% of the IPO proceeds, with the resulting issuer meeting TSX's original listing criteria
• Founding securityholders' equity interest in the SPAC must be at least 10%
• The acquisition must be approved by securityholders, excluding founders
• Securities issued in the IPO must have a conversion right and liquidation distribution feature

Link to article

SPACs May Now List on the NASDAQ; AMEX and NYSE Forced to Eat Their Own Damn Lunch

Yes, we know that this information is a little stale (the release came out on July 25th, 2008), but it's big news nevertheless. In the face of opposition from the North American Securities Administrators Association (historically, the structure of blank check companies makes the offerings risky for investors and SPAC securities have been highly promoted at the IPO stage and in aftermarket trading), the SEC said that it would impose additional criteria intended to protect investors and that it would review each SPAC that applies to list and evaluate the reputation of the SPAC’s sponsors and underwriters.

Final criteria are as follows for Nasdaq listing, all other criteria are similar to previous listings:

• 90% of the gross proceeds from the IPO must be deposited in trust
• One or more business combinations within 36 months
• Business combinations must be at least 80% of the trust

Click here for the release

NYSE joins Nasdaq in Proposing Minimum Guidelines for SPAC Listings

Highlights of the guidelines include:

• Minimum $250 million in total market capitalization and $200 million in public float at the time of initial listing
• Minimum of 90% of the IPO proceeds be placed in trust
• Business combination must be undertaken within three years

Click here for more

Nasdaq Proposes Minimum Guidelines for SPAC Listings: Submits Guideline to SEC

Now that Nasdaq and NYSE have had their lunch eaten by AMEX for over a year (55 IPOs have priced on the AMEX since the beginning of 2007 -- think of the lost revenue!), they've decided to jump in the game. In contrast to NYSE's more stringent requirements detailed in a previous post, Nasdaq, its less credible, but more liquid little brother, has proposed the following:

• Gross proceeds from the initial public offering must be deposited in an escrow account maintained by an "insured depository institution,"
• Business combination within 36 months
• Business combination using aggregate cash consideration equaling at least 80% of the value of the escrow account at the time of the initial combination
• Minimum market value of listed securities of $75 million on the Nasdaq Global Market; Minimum market value of listed securities of $50 million on the Nasdaq Capital Market