Dune (NASDAQ:DUNE) filed an initial proxy to extend its transaction deadline in the latest change of direction in its zig-zagging process concerning its pending combination with equities trading platform TradeZero.
The move caps off a strange month for Dune, in which it launched a lawsuit against TradeZero while its Board still recommended shareholders vote in favor of the merger, then changing this recommendation to “against” earlier this week, and now focusing on an extension vote before a completion vote.
Back when the suit was announced, we walked through the options for Dune with its transaction deadline coming up on June 22, 2022. Essentially: 1.) Terminate the transaction, extend the deadline and find a new deal. 2.) Terminate and liquidate. 3.) Put it to a completion vote and either close or liquidate with a “no” vote.
Because some conditions appear to be preventing Dune from terminating now and it would prefer to not liquidate, it appears to be taking a slightly different version of option #1 here. This would extend Dune’s transaction deadline to a point beyond the deal’s outside date, which is July 12th, at which time either party can walk away and Dune can then seek a new deal.
This is still a bit of a gamble, however. Dune is asking for an 18-month extension rather than the usual three or six months. Compared to the terms freshly IPO’d SPACs have been able to get in the current market, this is the equivalent of asking for a complete re-do. Its new transaction deadline would be pushed all the way to December 22, 2023. Dune’s extension proxy also does not currently show the sponsors making a contribution to trust to extend. Although, that might get added in subsequent filings. However, to attempt an 18-month extension without any sort of contribution to trust for investors who have already hung in there for 18-months, would most likely result in a significant amount of redemptions.
Even with a contribution, the average redemption rates for SPACs that have held extension votes in 2022 and are still searching or working to close an announced deal has been 48%.
But, this is just an initial proxy. Additionally, Dune has pledged to release additional information about the boards decision on a “no vote” for their combination with TradeZero by saying they intend, “… to more fully describe the reasons for the Board’s change in recommendation in the next filing of the Deal Proxy Statement.” The proxy also noted that TradeZero filed a motion to dismiss Dune’s lawsuit May 5, so there could be news on the litigation front soon as well.
At the SPAC of Dawn The SPAC market could be primed to wake up from its Turkey Day slumber with a bang this week as both Shepherd Ave (NASDAQ:SPHAU) and Tavia (NASDAQ:TAVIU) have lined up to IPO and five more SPACs have scheduled votes. Late Friday also saw the Future Vision II (NASDAQ:FVNNU) announce a...
Terms Tracker for the Week Ending November 29, 2024 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. This was a shortened holiday week, but SPACs still managed to put through a number of filings, which should usher in a busy first half...
Range Capital Acqusition Corp. (NASDAQ:RANGU) has filed to launch a $100 million SPAC with a broad approach, but with expertise in natural resources. The vehicle becomes the fourth SPAC that underwriter EarlyBirdCapital has put its name on so far this year, but it bears some different features than the rest of its 2024 slate. EarlyBirdCapital...
This holiday season is set to be an exciting one in the SPAC world as 10 sponsors and 11 de-SPAC’d companies can expect the gift of a lock-up expiration to mark it with. This makes it the busiest month for such activity in the second half of the year and at least a few parties...
At the SPAC of Dawn For Black Friday’s truncated trading session today, the broader action is likely to be focused on consumer stocks as investors gauge the scope of this year’s holiday spending surge. But, much of this will pass right by SPACs, because consumer has been a sector that has stymied teams more often...