NYSE Amendment To Allow For SPAC IPO's (NYX, NDAQ)

The NYSE Euronext (NYSE: NYX) has made proposed rule changes this week that would allow the listing of Acquisition Companies (ACs) on the NYSE.  They are describing special purpose acquisition companies, or SPAC’s, and blank check companies.  As the NYSE is acquiring the American Stock Exchange, this is probably going to be viewed as an expected formality.

But there was also a SEC filing proposal that would allow the NASDAQ OMX Group Inc (NASDAQ: NDAQ) to get into the SPAC listing process as well.  There are some differences in their proposal as far as the time allowed for a SPAC to find an acquisition vehicle.

While the NYSE does have holding companies and tracking stocks listed,it has not openly gone out on a campaign to attract SPAC listings.This will allow for that rule after the AMEX acquisition, if not before.

The release from the exchange does note that NYSE Euronext has alreadylisted special purpose acquisition companies on its European markets.Liberty International Acquisition Company is a SPAC that listed on NYSEEuronext’s Amsterdam market in a 600 Million Euro ($877.6 million) IPO,which was the second SPAC listing on NYSE Euronext’s Amsterdam marketafter the successful listing of PEHAC in 2007.

Also, the exchange noted that the NYSE does not currently have afinancial listing standard that would allow SPAC’s conducting an IPO tolist on the NYSE.  The rule will impose Acquisition Companies to haveat least $250 million in total market capitalization and $200 millionin public float at the time of initial listing, so some of the currentSPAC’s that have filed and some that have listed would in theory haveto go elsewhere if they are not grandfathered in.  There are otherterms proposed in the release, although more details will probably comeout around the approval.

Below are some of the SPAC’s that have been filed, and these are just the ones from this week:

• Oasis Group, Inc. is for the lodging or hospitality sectors, with a particular focus on hotels, resorts and related businesses.
• Market Street Acquisition Corp. is for the global consumer products and services industry.
• Sidhu Special Purpose Capital Corp. is for the depository institutions sector and other businesses which operate in the broader financial services industry.
• Transformation Capital looks like it will be a hedge fund.

If you wish to see the full IPO INDEX from 247WallSt.com you will see what appears to be a myriad of SPAC filings spanning most individual sectors.

Jon C. Ogg
March 7, 2008