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Friday Happy Hour Update: Pure, TKK Symphony, Experience and Opes
by Kristi Marvin on 2019-09-13 at 2:39pm

The Happiest of Hours is starting a little early. Mostly because the usual Friday evening rush of filings will most likely result in a “Boozy Dinner” post.

With that being said, in no particular order, the below is a round-up of current SPAC news.


PURE ACQUISITION CORP. (PACQ)

Pure Acquisition Corp. filed some additional documents earlier today and included was some supplemental information on the “what” and “how” of their warrant tender offer.  Included below are the relevant links to the filed documents, however, the main highlights are:

  • The offer is $1.00 in cash for each Public Warrant tendered.
  • The period of offer began yesterday, September 12th and will continue through October 10th, 2019 (the “Expiration Date”).
  • Investors can tender some, or all, of their warrants and there are withdrawal rights.  So if you change your mind, you can withdraw your tender at any time before the Expiration Date.
  • If Pure announces a combination post the closing of the tender offer, there will be another tender offer for the remaining outstanding warrants.

As was discussed before, this means PACQ will most likely not be announcing a transaction any time soon. At least not until the tender offer and extension vote are completed on October 10th. However, if PACQ can clean up some of their warrant overhang through this tender, they will be in a much stronger position to negotiate with any targets.  And perhaps that’s why they’re waiting to announce a combination.  Meaning, before PACQ dots any “i’s” and crosses any “t’s” on any definitive agreements, maybe both parties want to see what the cap structure looks like post-extension vote.  Either way, they’ll have an additional four months to complete a combination with an extended deadline of February 17, 2020.  As a reminder, PACQ is offering an additional $0.033 per share to trust for shareholders who do not redeem at the vote.

You can find the Tender Offer Statement HERE

Offer to Purchase (you’ll find the terms included in this doc) HERE

TKK SYMPHONY ACQUISITION CORP. (TKKS)

TKK Symphony also filed some additional documents today, specifically, their Super 8-K for their recently announced transaction with Glory Star New Media Group. However, we still do not have a presentation or any real substantive information on what this company is all about.

Mostly the documentation that was filed was a re-hash of what was included in the original press release, so it wasn’t that illuminating.  However, the transaction can be mutually terminated by either party if it has not closed by December 31st, 2019.  Additionally, in the event that TKK Symphony terminates the Share Exchange Agreement for a breach by a Glory Star Party or a Seller, the Glory Star Parties will be required to pay to TKK Symphony as liquidated damages a termination fee equal to $639,000, plus transaction expenses incurred by TKK Symphony and its affiliates.  This is pretty smart move by TKKS, since if they get far enough down the road with this deal and then have to terminate for whatever reason, it really puts the SPAC in an uncomfortable (and expensive) position since they would need to extend and, most likely, contribute additional funds to trust.

Regardless, we really need to understand more about Glory Star, so hopefully we get a presentation deck soon.

You can find the Super 8-K HERE

EXPERIENCE INVESTMENT CORP. (EXPCU)

Experience Investment Corp. priced their IPO last night and starting trading today on the Nasdaq under the symbol EXPCU.  Furthermore, with a performance some may call somewhat “surprising”, EXPCU has struggled to trade above $10.00 so far today.  Plus, there’s a real chance this SPAC could break $10.00 before the trading day is done as the underwriters work their way through the shoe. However, if you’re more familiar with the SPAC market, you are not surprised by this IPO’s day-one performance at all. That’s because this was a first-time SPAC team that went out with very aggressive terms given their experience – 1/3 warrant, 24 months, warrant call for shares.  Plus, we are also in an environment where terms have been tightening.  As we’ve said before, investors are the ultimate gate-keepers to terms and while most (as a rule) do not like 1/3 warrants, they are generally willing to play along if the team can demonstrate that they can execute.  And the easiest way to show that is to do a rock-solid FIRST SPAC.  In a tightening environment without that proven experience it’s pretty difficult to generate demand.  As a result, today’s deal got done, but there are a lot more sellers than there are buyers.

What would be great though, instead, is if the Experience team decided to shove it in everyone’s faces and announce a crazy, amazing acquisition in under 6 months.  Investors would gladly eat that humble pie.

OPES ACQUISITION CORP. (OPES)

Opes Acquisition Corp. just filed a new 8-K announcing that they are going to allow investors to redeem right up until the vote on September 16th.  The previous deadline, which is standard, is you are allowed to elect to redeem up until TWO DAYS ahead of the shareholder vote.  Sounds like Opes really, really wants everyone to redeem….

Additionally, if you recall, Opes is opting for only a two-month extension to November 15th.  This is sounding more and more like Opes DOES have a deal lined up, but either they have too much money and are trying to reduce the trust amount (meaning, the target is too small for the amount of cash currently in trust) or, they want to replace SPAC investors with a PIPE. Perhaps a PIPE done below $10.00.

Either way, everyone now has the ability to redeem today or up to 10:00AM Monday morning (EST), but do not be surprised if a deal is announced fairly immediately post-vote AND it includes a PIPE.

 

 

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