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Alternative Initial Public Offering Models - The Law and Economics Pertaining of Shell Company Listings on German Capital Markets
of: Axel Moeller
Mohr Siebeck , 2017
ISBN: 9783161540004 , 131 Pages
Format: PDF
Copy protection: DRM
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Alternative Initial Public Offering Models - The Law and Economics Pertaining of Shell Company Listings on German Capital Markets
Cover
1
Acknowledgements
6
Summary of Contents
8
Contents
10
List of Tables
14
List of Figures
15
List of Abbreviations
16
Introduction??????????????????????????????????????
22
Outline
22
Research Topic and Aim
22
Course of Study
23
Chapter 1: Background Information on SPAC Shells??????????????????????????????????????????????????????????????????????????????????????????????????????????????
24
I. Historical Development of SPACs in US and European Capital Markets
24
II. Fraudulent Blank Cheque Company Listings on the Penny Stock Market
25
III. The Passing of Corrective Legislation
26
IV. The Emergence of SEC Rule 419
27
V. The Emergence of 1st Generation SPACs
28
VI. 2nd and 3rd Generation SPACs and the Leap into European Capital Markets
30
Chapter 2: SPAC Anatomy and Transactional Practice??????????????????????????????????????????????????????????????????????????????????????????????????????????????????
32
I. Stakeholders
32
1. SPAC Founders and Management Team
32
2. SPAC Shareholders
33
3. Owners and Management of the Target Corporation
33
II. Corporate Governance Structures
33
1. Stipulated Time Frame
34
2. IPO Proceeds Held in Trust
35
3. Shareholder Vote and Right to Opt Out
35
4. Conversion Threshold Through Share Redemption
36
5. Managerial Compensation and Incentive Scheme vs. “At Risk Capital”
36
6. Minimum Fair Market Value Multiple
38
7. Interim Result
39
III. SPAC Transaction: A Twofold Double Trust Dilemma
41
1. Moral Hazard between SPAC Shareholders and Managers
42
2. Moral Hazard between Target Firm and SPAC Managers
44
a) Economic Benefits
44
b) Economic Risk Factors
46
3. Interim Result
48
IV. Case Study: Hicks Acquisition vs. Graham Packaging
48
1. Target Description: Graham Packaging I, Inc
49
2. Deal Terms
49
3. Investment Rationale
50
a) Premium Asset in the Packing Industry
50
b) New World-Class Senior Management Installed in 2006
50
c) Significant Upside Potential to New Investors
50
4. Company Overview and Transaction Structure
50
5. Interim Result
51
V. Summary
51
Chapter 3: SPACs and the Applicable German Law??????????????????????????????????????????????????????????????????????????????????????????????????????????
54
I. Going Public with a SPAC – Capital Markets Law
55
1. Prospectus Requirement
55
a) SPAC Units Consisting of Shares andWarrants
56
b) Public Offer
57
c) Regulated Domestic Market
58
d) Interim Result
58
2. Prospectus Content
58
a) SPAC-specific Challenges
59
b) Interim Result
61
3. Accessing Alternative Capital Market Segments
61
a) Admission Through the OTC Market
61
b) Admission Through the Regulated Market
62
c) Interim Result
63
4. Interim Conclusion: Capital Markets Law
64
II. Corporate Law Aspects Pertaining to SPACs
64
1. Aspect 1: SPAC Share Subscriptions and Trust Account
64
a) SPAC-specific Challenges
65
b) Interim Result
66
2. Aspect 2: Differing Share Classes for Sponsors and Investors
66
a) SPAC-specific Challenges
67
b) Interim Result
69
3. Aspect 3: SPAC Merger Transaction and Shareholder Approval
70
a) SPAC-specific Challenges
70
b) Interim Result
74
4. Aspect 4: Opt Out and Share Redemptions
74
a) SPAC-specific Challenges
74
b) Interim Result
76
5. Aspect 5: Acquisition or Liquidation
76
a) SPAC-specific Challenges
76
b) Interim Result
78
6. Aspect 6: Naked Warrants
78
a) SPAC-specific Challenges
78
b) Interim Result
79
7. Interim Conclusion: Corporate Law
80
III. SPACs in View of the BGH Judgments on Shell Utilisations
81
1. Shell Utilisations in Germany
81
a) Off-the-shelf Shell versus “Recycled” Shell
81
b) Shell Utilisation versus Business Restructuring
82
2. BGH Judgments on Shell Utilisations
83
a) 2002/2003: Doctrine of “Economic Re-incorporation”
84
b) 2010: Narrower Applicability of an “Economic Re-incorporation”
84
c) 2012: Dismissing Perpetual Liability?
86
d) Attempting to Classify SPACs: Empty or not?
87
3. Legal Consequences for SPAC Transactions
90
a) Disclosure and Register Court Controls
90
b) Adverse Balance Liability
92
c) Action Liability
93
4. Interim Result and Critique on the BGH Judgments
93
IV. Summary
95
Chapter 4: Statistical Analysis of SPACs??????????????????????????????????????????????????????????????????????????????????????????????
98
I. SPAC IPO and Execution Statistics
98
II. SPAC Excess Return Patterns: Shares and Warrants
100
1. The CAPM Approach
100
a) A Cursory Note on the Mathematical Framework
101
b) A Cursory Note on Market Efficiency
102
c) A Cursory Note on the Estimation of R? and Rm
103
2. Results: Excess Returns on SPAC Shares and Warrants
103
a) The SPAC Dilution Hurdle
105
b) Sensitivity Analysis: Addressing the SPAC Dilution Hurdle
106
3. Interim Results
108
III. Comparative Single Factor Portfolio Regression
108
1. Determining the Beta Equation
108
a) Automatic Rebalancing of Portfolios
108
b) Additional Considerations
109
2. Comparative Regressional Outputs and Interpretation thereof
109
a) Significance of Beta and Risk-adjusted Performance
110
b) Significance of Alpha
111
c) Coefficient of Determination (R2)
112
d) Comment on the Standard Error of Estimate
112
3. Interim Results
112
IV. Analysing the Trading Behaviour of SPACs
113
1. Fama–French Four Factor Regressional Approach
114
a) Market Weighted vs. Equal Weighted Portfolio Regressions
114
b) Interim Results
116
2. Trust Account Statistics
116
V. Pre-IPO SPAC Statistics
118
1. Comparative IPO Time and Cost Structure
118
2. Pre-IPO Target Focus of SPACs
119
VI. Summary
120
Conclusion and Outlook??????????????????????????????????????????????????????????
122
Bibliography??????????????????????????????????????
128
Index????????????????????????
132
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