GS Acquisition Holdings Corp. II (GSAH), re-filed its S-1 on Wednesday night, with a notable change – their warrants included in their units, which were originally 1/3 warrants, are now 1/4 warrants.
Oddly enough, just a couple of months ago we saw Social Capital Hedosophia re-file S-1s for IPOB & IPOC to adjust its warrants the other way (poor market conditions caused it to increase its warrant size from 1/4 to 1/3). Now, only a day after Bill Ackman filed for the largest SPAC of all-time with merely 1/9 of a warrant, GSAH II is taking advantage of the favorable market conditions to reduce its warrant size. In tandem, the sponsors will now be purchasing their at-risk private placement warrants at $2.00, as opposed to the $1.50 purchase price for the 1/3 warrants they were previously purchasing.
This is Goldman’s second dip into the SPAC market and it comes after a well-received merger with Vertiv and GS Acquisition Holdings I. So going from a 1/3 warrant to a 1/4 warrant is not all that surprising given this is a well-known sponsor and a team batting 1/1 in a hot SPAC market.
The weight of warrants in SPAC IPOs seems to be as cyclical as debt covenants – when things are good, investors will concede some protections since there is plenty of demand, but once the cycle turns we can expect a renewed pressure for increased warrants to make up for poor equity prospects.
But at the risk of saying “it’s different this time” the large capital raises and high-profile mergers could ultimately attract enough consistent demand for the downsizing in warrants to be a more secular trend. Then again, these are not normal times and we have only a few data points to go off of.
Additionally, today’s amendment included four new Director Nominees – Senator William Frist, Stevem Reinemund, David Robinson and Martha Sullivan. So now that the team has been fully rounded it out, this IPO should be pricing shortly. You can find the new S-1 filing for GSAH HERE.
Terms Tracker for the Week Ending March 24, 2023 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. While this week was relatively quiet on the filings front, we did see March’s second SPAC IPO price with Oak Woods Acquisition Corp’s $50 million...
Latest Non-Redemption Agreements: ExcelFin Acquisition Corp. ExcelFin Acquisition Corp. (XFIN) Adds Non-Redemption Agreement In connection with the special meeting of stockholders of ExcelFin Acquisition Corp. (NASDAQ:XFIN) to extend its completion deadline from April 25, 2023 to October 25, 2023, the company and its sponsor, ExcelFin SPAC LLC, entered into a non-redemption agreement with an unaffiliated third party....
Below is a daily summary of links to the latest SPAC news and rumors gathered across the web. Latest SPAC News: Momentus SPAC backers accused of deliberately engineering a catastrophic deal Momentus SPAC Backers Accused of Hiding Disastrous Deal’s Flaws A Momentus Inc. (NASDAQ:MNTS) investor sued backers of its blank-check merger with a shell company,...
DiamondHead Holdings Corp. (NASDAQ:DHHC) announced in an 8-K this morning that its shareholders approved its combination with Great Southern Homes at a special meeting March 23. Only 109,426 shares were redeemed in the connection with the vote, but DiamondHead has seen about 87% redemptions in total across all previous votes, leaving it with about $43.9...
Graf Acquisition Corp. IV (NYSE:GFOR) announced that it has signed a non-binding letter of intent to combine with clinical-stage biopharma company NKGen. This announcement is not a pure teaser as Graf IV is not facing an imminent extension vote and currently has until May 25 on its clock. It does, however, signal something of a...