March 14, 2008
Goldman Sachs to Try New Brand of SPACs
The WSJ reports that Goldman Sachs will finally enter the roaring SPACs field – but will do so that is more “shareholder friendly.” Check out this DealBook article – as well as the WSJ article. Here is an excerpt from the WSJ piece:
“But one characteristic of most SPACs is that the management teams invest a chunk of their own money in the empty shell, which they risk forfeiting if a deal doesn’t materialize, in exchange for a 20% stake in any company they do buy. In past discussions about SPACs, Goldman has asserted that the typical 20% stake appeared too generous for the amount of money management was putting at risk, and would be too dilutive for other shareholders once a deal was sealed.
According to the new structure Goldman is proposing, management will receive a stake of 10% or less in any company their SPAC successfully acquires, or about half the standard rate that most SPACs have.”