This afternoon, Burgundy Technology Acquisition Corp. (BTAQU), re-filed their S-1 amending their terms with a rare downsize to $300 million. It doesn’t happen often, but August has been a tough month for SPACs and investors have begun been pushing back on some SPACs
On top of changing the size of the offering from $400 million to $300 million, Burgundy has also shortened it’s timeline from 24 months to 18 months. Furthermore, the sponsors will now be over-funding the trust by $0.05 making this deal $10.05 in trust day-one. However, the warrants will remain the same at 1/2 warrant.
These are big moves, but by cutting the deal size by 25% and sweetening the trust value, maybe the underwriters get better traction now. Burgundy should price tomorrow night for Thursday trading, but we’ll have to wait and see. However, only a rare few SPACs have been trading well and we’re heading into peak vacation time ahead of the Labor Day Holiday. Normally, a big change in terms is enough to get investors interested, but as stated above, this has been a challenging month for SPAC IPOs. It will be interesting to see how BTAQ performs.