TKK Symphony Acquisition Corporation (TKKS) announced this evening that it would be extending the expiration of its tender offer to purchase up to 25,000,000 shares at a purchase price of $10.28 (plus accrued interest) for a SEVENTH time. The tender offer will now expire at 5:00 p.m. New York City time, tomorrow, Thursday, February 13, 2020, unless further extended or earlier terminated.
At this point, anything is possible. TKKS could extend every day up until February 20th. We have no idea. HOWEVER, we have a twist…
That’s because TKKS also stated that, “If the parties are unable to close the transaction on or prior to February 20, 2020, TKK intends to issue a dividend of one warrant to purchase one-half of one ordinary share for each public ordinary share of TKK issued and outstanding as of February 21, 2020, for a total of 25,000,000 warrants to purchase an aggregate of 12,500,000 ordinary shares of TKK. Each such warrant will be identical to the warrants included in the units sold in the Company’s initial public offering. TKK will not issue such dividend if the parties close the transaction on or prior to February 20, 2020.“
Not gonna lie….I don’t get it. This deal is set to expire on February 20th, so frankly, does a warrant dividend even matter if the company has to liquidate? This press release leaves more questions than answers. I’m going to try and figure this one out, but right now, if the company can’t close by February 20th, it should liquidate. So what’s the point of issuing a warrant for half a share to a liquidating company? Unless they mean the vote happens prior to the 20th, but the closing happens after the 20th. However this seems like a poor way to motivate investors to close earlier. If anything, it means they should drag their feet and make sure it happens as late as possible. Clearly I’m missing something, but stay tuned. Working to figure this one out…..