Warning the UK on Special Purpose Acquisition Companies (SPACs): great for Wall Street but a nightmare on Main Street
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Authors
Publication Date
2022Journal Title
Journal of Corporate Law Studies
ISSN
1473-5970
Publisher
Informa UK Limited
Type
Article
This Version
AM
Metadata
Show full item recordCitation
Reddy, B. (2022). Warning the UK on Special Purpose Acquisition Companies (SPACs): great for Wall Street but a nightmare on Main Street. Journal of Corporate Law Studies https://doi.org/10.1080/14735970.2022.2036413
Abstract
Special Purpose Acquisition Companies (SPACs) are non-operating entities seeking public listings with the sole intention of subsequently acquiring other companies. Once a target has been acquired, the SPAC de-lists and the newly enlarged group reapplies for listing as a, now publicly-owned, operating entity, thereby streamlining the process to IPO for the target. SPACs have surged in the US recently, with SPAC sponsors making concerted efforts to attract not only institutional, but also retail, investors. With a view to invigorating SPAC activity in the UK, new regulations have been introduced that will enable UK SPAC sponsors to mimic the structure of US SPACs. However, in this article, it will be discussed that unlike the more benign nature of traditional UK SPACs, the typical US-style SPAC is simply a financial instrument for institutional investors built upon the investment of retail investors, and promoting such an evolution in the UK may be misguided.
Embargo Lift Date
2023-08-24
Identifiers
External DOI: https://doi.org/10.1080/14735970.2022.2036413
This record's URL: https://www.repository.cam.ac.uk/handle/1810/333523
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