Gordon Pointe Acquisition Corp. (GPAQ) announced this afternoon that they need an additional three-months time to complete their acquisition, and as such, they will be offering $0.10 per share to trust for every share not redeemed at their extension vote. Additionally, if Gordon Pointe needs even more time than the proposed three-months, they are offering $0.033 for each additional month, up to three additional months total.
To be clear, Gordon Pointe stated they do not have a definitive merger agreement or even an LOI yet, but nevertheless, they are in discussions with multiple targets. However, it’s early June and their clock runs out as of the end of July, so the team is being realistic in realizing there is little to no chance in wrapping up a deal by that time. Instead they are offering SPAC investors who remain, post-vote, $0.10 per share for an additional three months, plus the opportunity for an additional $0.10 on top of that if they need a full six months.
If you’re a SPAC that needs an extension, this is the way to make SPAC investors happy. It’s a clear contribution (no guess-work involved) and it’s appropriate given the contribution amount and how much time is potentially going to run out. While investors would have preferred Gordon Pointe announce a transaction, this is still a decent substitute. Plus, the simplicity, in light of Gig1 and WRLS‘s opaque extensions, is far more preferable.
Currently, we are estimating Gordon Pointe’s cash in trust at their current deadline of July 26th, to be approximately $10.37. If the extension amendment is approved, the new cash in trust amount will be $10.47, with an additional $0.033 cents added for each additional month needed.
Let’s hope Gordon Pointe uses the additional months to cook up a good transaction.
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