Corporate & Securities Law

Goldman Sachs to Try New Brand of SPACs

By broc

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."

Full post as published by DealLawyers.com Blog on March 14, 2008 (boomark / email).