Advantages of SPACs Over Traditional IPOs
Corporate Documentation and Board Approvals
A de-SPAC transaction is an IPO for the Target, and a public company M&A transaction for the SPAC.
The SPAC and the Target will enter into a merger agreement.
The merger agreement must be approved by the boards of directors of both the SPAC and the Target.
The SPAC board must also approve holding the special meeting where SPAC stockholders will vote on whether to
approve the de-SPAC transaction.
As the buyer, the SPAC board's decision to acquire the Target will likely be subject to the deferential business
judgment rule (assuming the SPAC is a Delaware corporation).
Nonetheless, board members should make sure they were duly informed about the transaction, and outside
counsel should help the SPAC conduct a process that will withstand legal challenge.
Morgan Lewis
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