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06/03/23
16:17
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Originally posted by annep:
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An interesting case study in SPAC mergers is Security Matters (SMX). 99.5% shares of the SPAC were redeemed leaving the princely sum of ~US$2.08M in the SPAC. SMX has spent $11M on the proposal's documentation! Both SMX and CBR's respective merged entities are to be incorporated in Ireland giving rise to the application of Irish law, CGT etc In SMX the Independent Expert's report was that the merger was not fair, not reasonable and not in the best interests of shareholders yet the SMX board recommended the merger. I expect CBR will be looking for PIPE funding should the SPAC's cash be insufficient for their needs. The IE report will make interesting reading. In my view the benefits of this merger are heavily weighted toward the SPAC shareholders, who of course can sell their shares and continue to hold their warrants (exercisable at $11.50) leaving them with leverage to a rising share price. CBR shareholders on the other hand are screwed. SPACs have a two year window to find a deal ... any deal .. otherwise they have to return the funds with interest to their shareholders and cop the costs of set up themselves, around US$8M is common. I was a supporter of the company but not any more. I sold. Reminder to self .. next time I see a SPAC on the horizon - JUMP OUT FAST
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yep the high valuation must be a big driver of redemptions. i wonder if it would have been more successful if the pre-money valuation was lower? head in the sand stuff it seems.