Landcadia IV (NASDAQ:LGA) noted in a preliminary 14A filing today that it would be putting forward a proposal at an upcoming shareholder vote to buy back all outstanding warrants for undisclosed cash compensation.
The vote is to be held primarily to extend Landcadia IV’s transaction deadline from September 29 to March 24, 2024 and its proposals could still be modified further. But for now, this represents another entry in an increasing trend of SPACs looking to sort out their warrant overhang sooner rather than later.
For Landcadia IV, it is quite soon, however, despite being attached to an extension. The SPAC has not yet announced a definitive agreement to combine with a company. Therefore, the 1/4 warrants included in its units have a more hypothetical value than those associated with a SPAC with a deal in hand and a cash offer would likely be popular with holders.
Even with no specific cash price on offer, at least some warrant traders have noticed this inclusion in the proxy. Landcadia IV warrants (NASDAQ:LCAHW) are up about 78.8% this morning to $0.0490 after last closing at $0.0274.
Overall, the 1/4 warrant is the smallest coverage Landcadia SPACs have included in units after Landcadia II and III included 1/3 warrants and the first iteration IPO’d with 1 for 1/2. Still, the serial team, whose first three deals are valued at a median $9.44, appears to have made the calculation that it may be more competitive in target negotiations with less dilution on the table.
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