Tomorrow’s scheduled vote is cancelled
Leo Holdings Corp. (LHC), and Queso Holdings, Inc., the parent company of CEC Entertainment, Inc. (Chuck E. Cheese), announced this morning that they have mutually terminated their business combination agreement. The good news is, LHC still has some time to round up another combination since LHC’s clock doesn’t run out until February 2020. Approximately 6.5 months away.
While it’s always a bit of bummer when a transaction is terminated, in this case, it’s more of a positive than anything else. Clearly, investors did not like the deal as evidenced by where the share was trading leading into the vote. If you were following this combination, on Friday, LHC closed at $9.22, which is well below the estimated current trust value of $10.28. No amount of financial engineering or backstop magic was going to save this company from a further sell off post-closing. A re-cutting of the deal would have made sense, but the fact that the combination was terminated indicates that the seller wasn’t willing to do that. As a result, both parties decided to walk away.
The good news is, LHC is now free to go find a better acquisition and more importantly, they’ve gained a bit of knowledge from this process. Experience counts…even when it’s not the most ideal situation. In fact, you usually learn more from the “adverse” experiences, so fingers crossed the LHC team comes back with a huge winner.
SIDE NOTE: Interestingly, there’s already quite a bit of press regarding the termination since the “Chuck E. Cheese” deal was high profile. However, as is usually the case when it comes to articles about SPACs, financial journalists nearly always reference SPACs as “a so-called blank check company”. It’s not “so-called”. It is called. SPACs have been around long enough that there’s no need for it and frankly, it feels lazy and there’s a negative connotation to it. So can there please be a moratorium on this phrase? Don’t believe me? Go HERE, HERE, HERE and HERE.
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...
Remember the metaverse? Many do not. Meta’s (NASDAQ:META) attempted transition to virtually living and working seemed to mark a trend that went up and down quickly, but one SPAC deal has both survived that roller coaster and may rise with a second. Back in December 2022, Newbury Street (NASDAQ:NBST) announced a $1.85 billion combination with...
At the SPAC of Dawn Tucked into the bill that provides $95 billion in funding to American allies passed by the House this weekend is another measure that is likely to have far more impact on at least one pending deal in SPAC world. It would appear that the timing was fortuitous for TikTok rival...
With the passage this weekend of $95 billion in funding for Ukraine, Israel and Taiwan by the House of Representatives, some focus has gone back towards the defense sector, which has generally had a good year as a whole. But, SPACs have not been as active in defense, despite the fact that companies in the...