Alussa Energy Acquisition Corp. Files $225M SPAC
by Kristi Marvin on 2019-11-03 at 7:45pm

Friday evening, Alussa Energy Acquisition Corp. (ALUS.U), filed their $225 million SPAC for IPO, focusing on the energy sector, and more specifically, oil and gas exploration and production (“E&P”) or midstream businesses.  Alussa will be led by James Musselman, as non-Executive Chairman of the Board of Directors, and Daniel Barcelo, Chief Executive Officer, President and Director.   Mr. Musselman founded Dallas-based Caelus Energy, LLC, and Mr. Barcelo, previously, was a Portfolio Manager at Moore Capital Management.  Additionally, Nick De’Ath, the Chief Technology Officer of Alussa, has over 45 years management experience in the Upstream Oil and Gas Industry

So looking at this team, we have an experienced operator (Musselman), an investor/analyst (Barcelo) and a geologist (De’Ath). All the key ingredients for finding a successful energy acquisition.  However, there is this over-arching question of whether energy is still a good sector within which to be searching for a SPAC combination.  I’m not an energy sector analyst, so take what I’m about to say for what it’s worth, but energy is currently an out-of-favor sector and in general, out-of-favor sectors do not perform well day-one of trading.  And regarding the sector, real energy analysts will probably have their opinions, one way or the other, but if the sector rebounds, this team has all the ingredients for a successful acquisition.  The issue for this team is, how do you market a SPAC in a “currently” (emphasis on currently) out-of-favor sector?

Well, if we look at the structure, there are a two items that might change the conversation. For one, Alussa has an indication of interest for $11.25 million of units in the IPO at $10.00.  Plus, they’re bringing back an oldie, but a goodie – a Rule 10b5-1 program for the sponsor to purchase 4,500,000 warrants at $0.75. For those who don’t remember the SPACs of yore, it was, at one point, quite common for SPACs to utilize a 10b5-1 plan.  And for those unfamiliar with a 10b5-1 plan, they are a passive investment scheme (plan holders relinquish direct control over transactions), which provide a mechanism for companies and corporate insiders to purchase and sell securities of such company when they have Material Non-Public Information (MNPI). In the case of prior SPACs, they were utilized to purchase shares ahead of a vote.  To be clear, not all of Alussa’s warrants will be purchased ahead of the vote, just 4,500,000 of the 11,250,000 and at a price not to exceed $0.75. However, that does mean that if your half warrant “could” be purchased at price of up to $0.375 (half of $0.75), that means your unit is now worth north of ~$10.10.  By way of explanation, If we look at the last 1/2 warrant deal to split (and trade), New Providence Acquisition Corp. (NPA), which split on Friday, the common is trading at $9.77 and the warrant at $0.65 (it’s a 1/2 warrant structure, so a 1/2 = $0.325), therefore, the total unit = $10.095, whereas Alussa, using $9.77 for the share price, would be $10.145 ($9.77 + $0.75/2).  So using NPA as a base example, then Alussa is offering $0.05 more value. However, not every half warrant deal splits and trades to $9.77. The range could be higher or lower, but the share generally trades in the $9.75 to $9.80 range lately.  Additionally, not everyone will want to sell their warrant at the $0.75 price, but there’s a good chance a lot of warrant holders will sell SOME of their warrant position.  After all, why not and still keep some as an option?

With all that being said, the terms are thus: 100% in trust, 24 months to find an acquisition, 1/2 warrant.  This is a new team, and while they have tier-one energy credentials, a 1/2 warrant seems appropriate. Additionally, the 10b5-1 plan will make this deal an easy upfront sell to SPAC investors so it should IPO quite easily.  However, whether the energy sector will make for a good SPAC combination is far less easy to predict. To get to the root of the matter, do you think the world will be using more or less oil 5-10 years from now, regardless of how good the IPO looks today?

Summary of terms below:

Alussa Energy terms 11-3-19

 

Alussa Energy Acquisition Corp. Files $225M SPAC
Recent Posts
by Nicholas Alan Clayton on 2025-07-02 at 8:29am

At the SPAC of Dawn The rain of SPACs has continued with four expected to make their debuts during today’s trading sessions after pricing their IPOs overnight. The largest of these, EQV Ventures II (NASDAQ:EVACU), even managed an upsize, making it the largest SPAC IPO since Ares II (NYSE:AACT) pulled together $450 million in 2023....

by Nicholas Alan Clayton on 2025-07-02 at 6:28am

EQV Ventures II (NASDAQ:EVACU) announced the pricing of its upsized $420 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “EVACU”, Wednesday, July 2, 2025. The new SPAC plans to merge with an energy target involved in upstream exploration or production. EQV II’s management team is led by...

by Nicholas Alan Clayton on 2025-07-01 at 7:51pm

Vendome Acquisition Corporation I (NASDAQ:VNMEU) announced the pricing of its $200 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “VNMEU”, Wednesday, July 2, 2025. The new SPAC plans to focus its search on target business in the consumer sector operating in North America, Southeast Asia, and Europe....

by Nicholas Alan Clayton on 2025-07-01 at 7:47pm

Origin Investment Corp. I (NASDAQ:ORIQU) announced the pricing of its $60 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “ORIQU”, Wednesday, July 2, 2025. The new SPAC aims to mount a broad search for a target with a strong management and both revenue and earnings growth potential....

by Nicholas Alan Clayton on 2025-07-01 at 7:19pm

1RT Acquisition Corp. (NASDAQ:ONCHU) announced the pricing of its $150 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “ONCHU”, Wednesday, July 2, 2025. The new SPAC plans to target company in the digital asset ecosystem involved in the creation, storage, exchange or management of such assets, whether...

logo

Copyright © 2025 SPACInsider, Inc. All Rights Reserved