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.
AI has quietly been creeping to the top of the buzziest sectors for SPAC deals, but it’s become host to an even larger arms race in the private funding market. Elon Musk is currently pushing a $6 billion capital raise for his OpenAI competitor xAI at a valuation of $18 billion, according to TechCrunch, while...
At the SPAC of Dawn After a tepid month for SPAC activity in April, prominent teams are already scheduling things to make for some fireworks in early May. AltC (NYSE:ALCC) has already been turning heads as being the rare SPAC to trade significantly above trust value before close, and it has now booked the completion...
At the SPAC of Dawn There are signs that the macro environment for SPACs is gradually improving, but the Screaming Eagle team yesterday announced a non-redemption agreement for its combination with Lionsgate Studios. Such agreements are generally a lever one pulls when a SPAC expects a potentially turbulent closing. All in all, the terms for...
Israeli tech firms have made up an outsized proportion of SPAC activity and despite the ongoing tensions in its region, that dealmaking is continuing unabated. In fact, the SPAC named for the particular mission of taking Israeli firms public through SPACs, Israel Acquisition Corp. (NASDAQ:ISRL) in fact just took one step closer in completing that...
At the SPAC of Dawn Although the market has largely recovered from a negative stretch last week, the roller coaster is tilted back downward for Trump Media (NASDAQ:DJT), which slid -8% yesterday to $32.57 – one of its lowest points since closing with Digital World last month. Other SPACs and de-SPACs are having a more...