Friday November 14, 07:14 PM
UPDATE 1-Kanders SPAC withdraws $400 mln IPO
NEW YORK, Nov 14 (Reuters) - Kanders Acquisition, a blank check company, withdrew its application for a $400 million initial public offering, according to a regulatory filing on Friday.
'The markets are not conducive to this form of financing,' said Warren Kanders, chairman of the company's parent. 'Most SPACs (special purpose acquisition company) are trading at a discount,' he said, using another term for blank check companies.
Blank check companies are shell organizations that use the IPO proceeds to acquire another company. The acquired business go public after shareholders approve the transaction. Typically, a SPAC has two years to complete an acquisition, or investors get their money back.
Kanders said if market conditions improve, he would reconsider another IPO filing.
'With SPACs there are additional risks that investors don't want,' said Matt Therian, an analyst with Greenwich, Connecticut-based Renaissance Capital.
In its original filing in October 2007, Kanders Acquisition said it would not limit its target to any specific industry.
Kanders said he pulled the IPO in part to concentrate on another SPAC he sponsored, Highlands Acquisition Corp, which is seeking an acquisition in the health-care industry. Highlands launched its IPO in October 2007 and raised $138 million.
Kanders is a major shareholder in Federal Signal Corp , a diversified manufacturer.
After an active year in 2007 during which 65 SPACs went public in the United States, raising $11.6 billion, only 14 have issued stocks and warrants so far this year, raising $3.6 billion, according to Thomson Reuters (TRI.TO - news) data.
Kanders Acquisition becomes the 83rd company to withdraw its IPO this year.
The last SPAC to launch an IPO in the U.S. was Chardan 2008 China Acquisition Corp, which raised $55 million in August.
The Kanders IPO lead underwriter was Citi.
(Reporting by Phil Wahba; editing by Jeffrey Benkoe) Keywords: KANDERS/IPO
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