A US$400 million (€380 million) Irish-backed so-called blank check venture will ask investors to extend a deadline for finalizing a merger or acquisition to July next year.
North Atlantic Acquisition Corporation (NAAC) currently has until the end of January to close a transaction or return its funds to shareholders.
If it secures the extra breathing room, it’s probably time for the investment vehicle.
It has informed shareholders that the board believes it is in shareholders’ “best interests” to continue its existence through July 26 “to give us more time to complete an initial business combination.”
“We will not be able to consummate an initial business combination until January 26, 2023 and are therefore asking for an extension of this timeframe,” it will inform shareholders.
It filed a proposed circular to its investors with the U.S. Securities and Exchange Commission on Tuesday. NAAC raised $400 million in January last year and is listed on the Nasdaq in New York.
The company almost certainly has a potential deal in the works. It’s probably the only way to convince shareholders to stay on board instead of demanding a return of their money.
Even if the renewal request is submitted, shareholders automatically have the right to demand the return of their money.
And if NAAC waits until next year to return its money to the investor, it will have to pay a new 1 percent excise tax that goes into effect in the United States on January 1.
NAAC was co-founded by its CEO, Gary Quin. He is a former Vice President of Credit Suisse. Another key co-founder is Irish businessman Patrick Doran. Mr Doran sold his Dublin-based packaging company, Americk, to Spanish group Saica in 2016. He then founded Woodberry Capital, a private investment firm.
NAAC is one of dozens of Special Purpose Acquisition Companies (Spacs), aka blank check companies, formed in recent years as investors, awash with cash in a low-interest-rate environment, were looking for better returns on their money.
NAAC had planned to merge with US tech company Telesign, owned by Belgian wireless company Proximus, earlier this year.
This deal valued Telesign at more than $1.7 billion, including cash from NAAC. Proximus would have retained a 66 percent stake in Telesign. NAAC shareholders would have owned 22 percent of the combined company, while 4.9 percent would have been split between NAAC’s founders.
That would have provided a huge payday for founders like Mr. Quin and Mr. Doran, who raised just $25,000 for their founding shares. They control 20 percent of NAAC’s total outstanding shares.
But the deal fell through in the summer.
The virtual stockholders meeting that NAAC now plans to hold will also include a motion giving the board the power to adjourn the meeting to extend the deadline for closing a deal if it believes the extension proposal is unacceptable becomes.
“In the event that the number of shares of common stock present in person at the meeting online or by proxy and voting ‘yes’ to the renewal amendment proposal is insufficient to authorize the renewal, the Company may request that the meeting to adjourn to allow for renewal Board to solicit additional powers in favor of the renewal amendment proposal,” it notes.
https://www.independent.ie/business/irish-backed-spac-asks-investors-for-more-time-to-invest-their-400m-42199626.html Irish-backed company Spac is asking investors for more time to invest their $400 million