HAC SPAC Meeting Setback

Boston-based Harbor Acquisition Corporation (Amex: HAC; HAC.U; HAC.WS; "Harbor") announced today that it intends to further adjourn the special meeting of its stockholders now scheduled for 10:00 a.m. (EST) on Friday, December 21, 2007, without conducting any business, and reconvene the special meeting at 10 a.m. (EST) on Monday, December 31, 2007, in order to give it more time to solicit proxies and its stockholders additional time to consider and vote on the proposed acquisition of Elmet Technologies, Inc., and the related proposals at the special meeting.

The reconvened special meeting on December 31, 2007 will be held at the offices of Davis, Malm & D'Agostine, P.C., One Boston place, 37^th Floor, Boston, Massachusetts, the same location as described in the original notice for the special meeting.

Harbor encourages all its stockholders to vote at the reconvened [a/k/a New Year's Eve] special meeting.

About Elmet Technologies, Inc.

Originally founded in 1929, Elmet became an independent company in early 2004 when its current CEO Jack Jensen led the management buyout of Elmet from its former parent, Philips Electronics North America Corporation.

Read more >>> press release

UPDATE: Harbor Acquisition Corporation Announces Further Adjournment of Its Special Meeting of Stockholders to February 8, 2008

Grand Slam Acquisition Corp. (APP, VRY, TCW) - SPAC IPO

Grand Slam Acquisition Corp. is a SPAC (special purpose acquisition company) that has filed to come public via an IPO. But this is larger than most SPAC IPO's with a $750 million proceeds target. Each unit will consist of a share of stock at the $10 set SPAC price and will consist of a warrant. Citigroup is listed as the lead underwriter.

As you can see by its filing, it is not honing in on a set business for the time being: "Our efforts in identifying a prospective target business will not be limited to a particular industry although we will not search for target businesses in the financial services industry or the entertainment, media and/or publishing industry.... We do not have any specific initial business combination under consideration. We have not, nor has anyone on our behalf, contacted or been contacted by any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction."

While the target sector may not be disclosed, the SPAC says it wants to pursue stable leadership companies. Here are the notes:

• Established Companies with Proven Track Records;
• Companies with Strong Free Cash Flow Characteristics;
• Strong Competitive Industry Position;
• Experienced Management Team.

The company is led by the old Endeavor Acquisition Corp. chairman Eric Watson, which just recently became American Apparel (AMEX:APP). He's been around this game before as he has been behind other SPAC's such as Victory Acquisition Corp. (AMEX: VRY) with a $390 million market cap today, Triplecrown Acquisition Corp. (AMEX: TCW), and Performance Acquisition Corp.

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Blank check IPOs soared in popularity

In 2007, special purpose acquisition companies, or blank-checks, made up 23% of the total number of IPOs. In other words, nearly a quarter of IPOs this year have been for businesses with no business. A blank check IPO exists to raise money, and then seeks to use that money to acquire another company.

For instance, Endeavor Acquisition went public as a blank-check IPO and then acquired American Apparel. Now the company trades as American Apparel (AMEX: APP), and Kevin Kelly wrote about why he thinks that company is a buy here.

Sometimes companies that go public through this process can be good investments, but there’s something investors need to keep in mind: A company that has been acquired by a SPAC has just been put up for sale and is therefore unlikely to be undervalued. If the sellers could have gotten more for it, they would have sold it to someone else.

A piece in the Wall Street Journal discusses (subscription req'd) blank checks and some of their pitfalls. American Apparel is definitely one of the better/most interesting companies to go public this way (the CEO’s alleged perversions aside) in recent years but, in general, I think blank checks are something for investors to avoid.

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Be afraid. Be very afraid.

According to Fortune, blank check IPOs are popular again. Also known as special purpose acquisition companies (SPACs), these are IPOs that are done to raise money to possibly buy another company. That is, you are investing in a company with no business model, no sales… nothing. You’re just hoping that the management can find some brilliant acquisition that will create value.

Given the tendency of acquisitions to do anything but create value, you have to wonder why anyone would invest in a SPAC. But that doesn’t mean people won’t do it anyway. From Fortune: “SPACs have soared in popularity in recent years. So far this year, some 40 blank check companies have raised $5.3 billion through public offerings, compared to 13 companies that raised $484 million in all of 2004, according to Dealogic.”

The idea of investing in a company where you have no idea what the business will be is hardly new. During England’s 18th Century South Sea Bubble, a promoter raised money through a stock offering for “a company for carrying on an undertaking of great advantage, but nobody is to know what it is.”

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Starwood's Sternlicht seeks to surf SPAC wave

IPO Filing Floodgates: Third Wave Acquisition Corp. (TWV)

Third Wave Acquisition Corp. has filed for an initial public offering to sell 35,000,000 million units to raise $350 million, with each unit consisting of one share and one warrant. Deutsche Bank Securities is listed as the sole lead managing underwriter as of the filing. This is another special purpose acquisition company (or "SPAC") that intends to acquire or merge with an outside company. Its proposed ticker is "TWV" on the American Stock Exchange.

Read more >>> 24/7 Wall St. article

No bonds for Hammerin' Hank...

SPAC IPO FILING: Sports Properties Acquisition Corp. (HMR, TAXI)

Sports Properties Acquisition Corp. filed to sell 20 million units at the traditional $10.00 per unit, and the company is granting an overallotment allowance of 3 million more shares. Sports Properties is taking the proposed ticker "HMR" on the American Stock Exchange and so far lists only Banc of America Securities as the lead underwriter.

The company is a SPAC, a special purpose acquisition company, so it has no existing operations.

This was formed to acquire, through a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction, joint venture or other similar business combination, one or more domestic or international operating businesses. It intends to focus efforts on companies that create, produce, deliver, distribute, market content, products and services pertaining to the sports, leisure or entertainment industries.

Here is SPAC's managment all-stars:

• Tony Tavares, President and Chief Executive Officer, is the former CEO and President of SMG, a premier management company engaged in the private management of stadiums, arenas, theaters and convention facilities.
• Jack Kemp, Chairman, was the Republican Vice Presidential candidate in 1996, and is a former AFL quarterback.
• Andrew Murstein, Vice Chairman and Secretary, has served as the President and a director of Medallion Financial Corp. (NASDAQ:TAXI), a publicly traded investment company, since its IPO in 1996.
• Richard Mack, Director, is a senior partner at Apollo Real Estate Advisors.
• Henry "Hank" Aaron, Director, the unjuiced homerun king of major League baseball.
• Mario Cuomo, Director, is a former three-term Governor of the State of New York.
• Randel Vataha, Advisor, is a former Stanford football player and NFL wide receiver.
• Robert Caporale, Advisor, is a former sports and entertainment law attorney who has represented a number of professional sports leagues and franchises.

A unit consists of 1 common share and 1 warrant with a $7.50 strike price per unit. Maybe investors will get to own another public sports team since these have essentially all gone private. Prior public sports teams were the Cleveland Indians and Boston Celtics, and the Green Bay Packers are one of the community owned and quasi-public companies (that you can't buy a share in easily).

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Ladenburg's SPAC Alert

SPAC Product Overview

Special Purpose Acquisition Companies, commonly referred to as "SPACs," are newly formed companies that raise equity capital through an initial public offering for the sole purpose of pursuing a business combination in a dedicated industry or geographic location. SPAC offerings are typically sponsored by experienced corporate executives, managers of private equity firms and seasoned entrepreneurs.

The offering is in the form of a unit, comprised of a common share and warrant(s). The offering proceeds are held in escrow in an interest bearing trust account. Immediately following the offering, the SPAC typically has 18 months to announce an acquisition and then an additional six months to receive shareholder approval of the proposed business combination. The sponsors typically receive founder shares or units for 20% of the company, which have value only if an acquisition is completed.

If an acquisition is not completed within the allotted 18 to 24 months, the cash held in escrow is liquidated and shareholders are returned their prorated cash amount. This typically would lead to an investor having 90-100% of their initial investment returned. Currently, SPACs trade on the over-the-counter bulletin board, the American Stock Exchange, and the Alternative Investment Market (AIM), a subsidiary of the London Stock Exchange.

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Boise unrolls paper and packaging units via SPAC

Chicago private-equity firm Madison Dearborn Partners said this morning that its Boise Cascade unit has agreed to sell its paper, packaging and newsprint segments to a publicly traded shell company for $1.625 billion.

The sale to Aldabra 2 Acquisition Corp. offers a fast way to return the Boise Cascade operations to public ownership.

Read more >>> view article.