HICKS ACQUISITION (NYSE: REN): The SPAC’s deal with Graham Packaging on life support, dealmaker Thomas O. Hicks rejuvenated his $550 million SPAC with a new target, Resolute Energy Corp. Investors including SPO Advisory piled on and the merger pulled through, taking warrants that were worth $0.08 just weeks away from the SPAC’s deadline and inflating their value to $2.17 on Dec. 18. Since the IPO, units are up more than 30 percent.

TM ENTERTAINMENT (AMEX: CCME): The Ted Green-led SPAC went from, in March, being sued by Bulldog Investors to liquidate early, to finding a winning target in China MediaExpress. The $82 million SPAC went on a successful warrant buyback campaign after the deal was completed, buying nearly 2 million warrants at $0.50 a pop. The company’s revenues grew 65% last quarter and net income was up 43 percent. The SPAC’s units have more than doubled in value from their worth at the time of the IPO, making this deal one of the best SPACs of the recession.

SPRING CREEK ACQUISITION (NASDAQ: AUTC): The Mighty Mouse of this year’s SPACs at $41 million, Spring Creek brought AutoChina International public in April 2009 and almost immediately began working to sell the company’s dealership business to focus on auto financing. The result was an explosion of value that investors have been riding for eight months. Target managers who decided to buy warrants prior to the deal’s vote saved a mint in cash and dilution. Warrants went from trading for pennies to hitting an eye-popping $20 each as they became eligible for redemption and the SPAC’s units are up a mind-boggling 400%-plus. Yes: four hundred percent.

Losers:

GLOBAL CONSUMER ACQUISITION (WLBC): First, the SPAC sought to bring public some assets of Colonial Bank, but that target failed and was bought by an owner who then refused to sell to the SPAC. Not being short on banks desperate for a capital injection, management arranged a new merger to bring Service1st Bank of Nevada and 1st Commerce Bank public. It worked—until it didn’t. Days after the deal’s completion in October, AMEX officials notified the merged entity, now called Western Liberty Bancorp, it would be de-listed for not maintaining enough shareholders. 1st Commerce then dissolved its merger agreement, leaving Global Consumer and Service1st looking for a new exchange to trade on (it is trying to get onto NASDAQ) as well as a new target. The SPAC’s units are trading 15% below their IPO value now—but the blank check’s management at least succeeded in getting a deal done.

ASIA SPECIAL SITUATION (AMEX: CIO): In March 2009, Asia Special Situation announced a deal to buy White Energy, an Australia-based energy supplier for Korea. Months dragged on until July, when the SPAC amended its agreement to offer the target more cash. As the vote date drew closer, the target got cold feet and in November instead opted to accept a $100 million capital injection from an outside investor. The SPAC—which might have had success had it sped its deal vote’s arrival—will liquidate, more than nine months after its merger was first revealed.

PINPOINT ACQUISITION (PPAC): In May, Pinpoint Acquisition announced a deal had not materialized sufficiently and that it would liquidate, retaining only a few thousand dollars and remaining a shell company in search of SPAC-capital. After holding onto shareholders’ redemption checks for up to seven months following the liquidation announcement, the SPAC found a new way to raise funds. It sued former target Elbit Systems for bad faith for a deal that had fallen apart months earlier. That suit has yet to proceed.

Other SPACs getting high marks for 2009 include GHL Acquisition Co. (NASDAQ: IRDMU), 2020 ChinaCap (NASDAQ: EDS) and China Opportunity (GGEEF). More blank checks that ran into difficulty after the merger include Triplecrown (OTC: CAGZ), InterAmerican (IAQG), and Alyst (OTC: CNWHF). 2010’s SPAC deals already have investors buzzing; the BPW-Talbots (AMEX: BPW) deal pushed the SPAC’s shares past redemption value almost immediately. Chardan 2008 China (AMEX: CACA) reversed course; that SPAC has sized up a Florida-based company that processes property bankruptcies for a deal. That blank check, too, is currently seeing its shares trade above trust. New SPAC GSME Acquisition Co. (OTC: GSMEF) priced late this year, marking the first post-recession blank check to emerge and 57th St. Acquisition Co. continues to raise capital. Smaller and boutique banks keep working to connect SPAC sponsors with management teams and in Toronto, the TSX awaits its first blank check.

For more on these and other SPACs, please visit www.SPACupdate.com.

Lately, Victory Park has helped several SPACs make it across the finish line, including Hicks Acquisition Co. (AMEX: TOH), Enterprise Acquisition Co. (AMEX: EST) and Triplecrown Acquisition Co. (AMEX: TCW). Earlier this week, Guardian Life Insurance Co., a lender to Kennedy-Wilson, bought into the blank check and was allowed to appoint one of its board members.

China Fundamental Acquisition Co. (OTC: CFQCF) has a deal. The SPAC has not revealed its merger target, so there’s not much more to report than that. The blank check’s warrants, at around $0.95, were trading higher than any other SPAC that had not declared a merger, prior to its announcement. China Fundamental told its shareholders it could look to extend its deal deadline by up to a year, to May 2011.

Global Brands Acquisition Co. (AMEX: GQN) has less than a month to complete a merger, but there is no time to get started like the present. As several SPACs have already done this fall, Global Brands will look to take Gerrity International, a West Coast REIT, public.

North Shore Acquisition Co. (OTC: NSAQ), which was working to get its merger with a Korean offshore drilling company completed by early December, announced that it is now attempting to push its deal deadline back to March 2010.

Asia Special Situation Acquisition Co. (AMEX: CIO) saw its deal with White Energy collapse when its target took a $100 million investment from another bidder. The SPAC now has until Jan. 10, 2010 to identify a new target and get a merger completed.

For more on these mergers and other deal votes, please visit www.SPACupdate.com.

NRDC Acquisition Co. (AMEX: NAQ) is mimicking the expected success of SPACs that are buying or have bought REITs—except, instead of trying to buy one, like Capitol Acquisition Co. (AMEX: CLA) or Enterprise Acquisition Co. (AMEX: EST), the $414 million SPAC has elected to become one, with its shareholders expected approval on Oct. 20. For a while, NRDC shares have traded above their redemption value, making that SPAC and 2020 ChinaCap two of the three currently trading at such a high value. Shares are trading at around $10.40, about five percent above trust. Recently, warrants were trading at around $1.05 and market sources have indicated the blank check’s deal will be pushed through.

Investors have not been as high on Triplecrown Acquisition Co. (AMEX: TCW), the SPAC that looks to bring public Natural Dairy, a subsidiary of Cullen Agricultural Technologies. The SPAC wants to buy the milk farm process optimizer that will also use proceeds from the $552 million blank check to buy distressed properties—namely, farmland. It is expected that on Oct. 21, the SPAC will convene shareholders for a deal vote; the blank check only has until Oct. 22 before it will be forced to liquidate without a completed merger. Shares have been trading recently at around $9.24, more than $0.50 off trust, and warrants are selling for a mere $0.09.

Brought exclusively by the SPACupdate.com team.

October 19, 2009

United Refining Energy (AMEX: URX) will merge with Oklahoma City-based oil and natural gas producer Chaparral Energy, the SPAC announced Tuesday. The deal announcement sent the blank checks’ warrants spiking up to 45 cents in Tuesday trading; its shares closed at $9.96.

Thanks to the success of the Hicks Acquisition/Resolute Energy (NYSE: REN) deal—which, as of press time, had successfully generated value after the merger’s close—the $450 million SPAC has an opportunity to cash in on rising investor sentiment.

Yield-to-trust players that still have stakes in the SPAC also have incentive to sell shares to other buyers who will support the merger, or, simply push the deal through. Israel Englander and HBK Investments vehicles control millions of warrants in the SPAC, along with about 20% of its shares, according to the most recently available federal filings.  The blank check is looking to have at least half of its warrant owners redeem holdings for $0.50 each at the deal’s closing.

CS China Acquisition Co. (OTC: CSAQF) looks to bring public an Asian gaming promotion company that will operate baccarat tables in South Korea and China. The SPAC will rearrange warrants, lengthening deadlines and raising strike values, as many blank checks have done to entice shareholders and warrant holders to bet on a deal’s success.

Integrated Core Strategies has more than a million warrants in the $32 million SPAC and warrant prices rose to $0.35 in Tuesday trading.  The SPAC’s shares are still well off their trust value, up three percent in Tuesday trading, closing at about $5.69. Still, the shares are about $0.30 below their redemption value.

Investors should note that the SPAC’s timetable will allow for its management team to carefully align the blank check’s shareholders prior to a deal vote, which has not yet been announced. CS China’s deal deadline is not until 2011. The SPAC will issue about 10.4 million shares and an equal number of warrants to Spring Fortune Investment, which owns Asia Gaming. The target runs faming facilities in Macau, China, and will launch an additional facility in South Korea.

The SPAC’s deal with its target will increase warrants’ strike price to $6.10 and extend their life to a five-year time frame following their issuance. Their exercise is also contingent upon the target’s GAAP net income exceeding $30 million for the fiscal year prior to activation. The warrants will automatically activate after shares trade regularly above $9.50.

TM Entertainment & Media (AMEX: TMI) will have its deal vote Oct. 15 to bring public a Chinese marketing company. Similar to its liquidation fight with activist investor Phillip Goldstein, who demanded the blank check redeem shareholders and liquidate early in March, TMI’s chances for success are largely attached to Goldstein’s willingness to either sell the shares to a shareholder in support of the deal, or vote in favor himself.

Because he has about two million of the SPAC’s warrants, Goldstein’s approval of the blank check’s deal has the potential to generate value for him, provided he is willing to bet on the target’s chances in the public markets

The SPAC’s warrants are trading at around $0.44 each and its shares are trading $0.41 under trust, at $9.50, so market sentiment could be indicating that the blank check will get its deal done. However, the blank check’s volume has been relatively low for a month. Shares rose about three percent in Tuesday trading, to $7.76.

Next week, three announced SPAC mergers—2020 ChinaCap Acquiro, NRDC Acquisition and Triplecrown (TTY, NAQ, TCW)—will keep investors in the asset class attentive to their deal votes. For more on these SPACs and other blank checks, visit www.SPACupdate.com.

NRDC Acquisition Co. (AMEX: NAQ) broke this painful streak for blank check management teams. Oddly, it is the only SPAC approaching a deal vote that does not have a specific target in mind.  NRDC simply aims to convert itself to REIT status and begin buying up distressed property. The SPAC’s shares traded up to $10.00 each at the close of trading Monday; recently, warrants sold at around $0.77, marking a substantial rebound. The SPAC’s per-share redemption value is $9.91. NRDC’s vote date comes in mid-October.

NRDC is not the only blank check pursuing real estate investments. Capitol Acquisition Co. (AMEX: CLA) has paired up with Pine River Capital Management’s Two Harbors Investment Corp.  The SPAC’s deal vote must come by early November.

As you will see below, there are many more recent developments in other SPACs and overlapping SPACs that will be coming front and center in the coming weeks.

Elsewhere, GHL Acquisition Co. (AMEX: GHQ) continues to execute buybacks as it approaches its Sept. 23 deal vote date.  Last week came word that Weiss Multi-Strategy Advisers took a stake of 6% in NRDC Acquisition Co. (AMEX: NAQ).  Also last week, Azimuth Opportunity LTD sold out of its stake in 2020 ChinaCap Acquiro Inc. (AMEX: TTY). Previously, it held a 5.6% stake.

Pine River Capital Management last week took a stake of 10% in Si Mei Te Food Co., the company brought public via China Discovery Acquisition Co. (CADUF). The investor, which looks to have affiliate Two Harbors Investment Corp. bought by SPAC Capitol Acquisition Co., has increasingly been buying into companies that were brought public, and lost value, in 2009.

Global Consumer Acquisition Co. (AMEX: GHC) has a new bank to buy, after its deal to buy assets from Colonial Bank fell apart with that target’s collapse. Now—along with 1st Commerce Bank—the SPAC will buy Service1st Bank of Nevada. The new entity will still be known as Western Liberty Bancorp and Service1st executives will mostly populate its top ranks. The SPAC has until late November to complete the deal.

Prospect Acquisition Co. (AMEX: PAX) has a deal to bring public a real estate investment firm with operations in the U.S. and Japan. The $248 million SPAC will buy Kennedy Wilson Inc.; it is requiring redemption of at least half of its warrants at $0.55 each. Warrants that are not redeemed will be subject to higher strike prices and a longer expiration date.  In a statement, the SPAC’s target highlighted distressed opportunities in California, where up to $10 billion in newly-constructed real estate is set to re-price to meet market conditions. The SPAC’s deal deadline comes in November.

Triplecrown Acquisition Co. (AMEX: TCW) is looking to buy Cullen Agricultural Technologies Co., which is rolling out Natural Dairy, a milk-processing optimizer, across the Southeast U.S. The target will eventually also buy up farmland along the Eastern Seaboard, where it looks to bring more efficient processing to the dairy industry. Triplecrown shareholders will wind up with 78% of the company going public; warrant strike prices and expiration dates have both been adjusted up to support the transaction. The SPAC’s deal deadline comes next month.

InterAmerican Acquisition Group (OTC: IAQGU) and China New Cities Development successfully merged, the blank check revealed. The SPAC’s shareholders who supported the transaction will be redeemed $4.85 per share. In days leading up to the SPAC’s deal deadline, the blank check repurchased about $24 million from would-be dissenting voters. The SPAC’s shares traded down more than 33% on the news.

-Brought to us exclusively by the SPACUpdate.com team.

As you can see by its filing, it is not honing in on a set business for the time being:  "Our efforts in identifying a prospective target business will not be limited to a particular industry although we will not search for target businesses in the financial services industry or the entertainment, media and/or publishing industry…. We do not have any specific initial business combination under consideration. We have not, nor has anyone on our behalf, contacted or been contacted by any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction."

While the target sector may not be disclosed, the SPAC says it wants to pursue stable leadership companies.  Here are the notes:

• Established Companies with Proven Track Records;
• Companies with Strong Free Cash Flow Characteristics;
• Strong Competitive Industry Position;
• Experienced Management Team.

The company is led by the old Endeavor Acquisition Corp. chairman Eric Watson, which just recently became American Apparel (AMEX:APP). He’s been around this game before as he has been behind other SPAC’s such as Victory Acquisition Corp. (AMEX: VRY) with a $390 million market cap today, Triplecrown Acquisition Corp. (AMEX: TCW), and Performance Acquisition Corp.

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Jon C. Ogg
December 27, 2007