Given the vast amount of SPAC capital chasing a finite number of acquisition targets, and the relatively short window in which to make an acquisition, we are likely to see a number of SPAC sponsors trying to do deals at inflated valuations. A Solid Proxy Solicitation Plan is CriticalTo avoid losing an acquisition approval vote, SPAC sponsors need to pay careful attention to planning and executing the solicitation of shareholder support. What some SPAC sponsors may not realize is that many institutional holders have a policy of following the advice of ISS or Glass Lewis, who have been known to recommend against approval of a SPAC acquisition. A sponsor could therefore be in the theoretical position of winning the acquisition vote, but having insufficient capital to complete the deal. As newly-minted SPAC sponsors consider the challenges of winning the shareholder vote, it’s worth looking back at a great American novel about elections and their consequences: Robert Penn Warren’s All the King’s Men.

Source: Forbes December 19, 2020 14:15 UTC