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Third Point LLC Files for $400 Million SPAC

Far-Point

Third Point LLC Files for $400 Million SPAC

May 22, 2018 INTEL by Kristi Marvin

Dan Loeb’s Third Point LLC Debuts New SPAC: Far Point Acquisition Corporation

Third Point LLC, makes its entry into the Special Purpose Acquisition Company field with Far Point Acquisition Corporation, a $400 million IPO focusing on the Fintech space.  Far Point will be led by Tom Farley, former President of the NYSE, and David Bonnano, a Managing Director at Third Point LLC.

Summary terms include:
  • $10.00 unit comprised of one share of Class A common Stock and one-third of a full warrant
  • 100% held in trust ($10.00 per share)
  • 24 months to announce an acquisition (+ 3 month extension with LOI)
  • Warrant Redemption Price: $18.00
  • Redemption Rights:  limitation of 15% of the shares sold in the IPO
  • Sponsored by Far Point LLC, an affiliate of Third Point LLC
  • Underwriter fees: 2.0% + 3.5% deferred fee

Additionally, the sponsor (Third Point) has entered into a Forward Purchase Agreement at $9.50 per forward purchase share.  The amount of forward purchase shares is capped at the amount of redeeming shares over 20 million (half of the IPO), or essentially $200 million.

In summary, this is a nice feather in the cap for Credit Suisse and BofA Merrill Lynch and a well structured deal.  The built-in three month extension removes the dreaded “extension proxy vote” where shareholders can redeem plus, the (potentially) size-able backstop gives any target companies confidence in the cash amount in trust.  Furthermore, there is the name and track record of Third Point, one of the top performing hedge funds of the past two decades.

While it remains to be seen how target companies respond to an acquisition offer from a SPAC sponsored by an activist fund, this one still looks like a winner.  The IPO should have no problems with marketing.

Finally, Issuer’s Counsel and Underwriter’s Counsel are Ellenoff Grossman & Schole LLP and Skadden, Arps, Slate, Meagher & Flom LLP, respectively.  These two law firms are arguably the most experienced in representing SPAC transactions and consistently lead in the Legal League Tables.  Far Point is well represented on all fronts.

ByKristi Marvin