One of the most public battles this year involving a special purpose acquisition vehicle may settle quietly on Monday when
Far Point Acquisition Corp
shareholders decide whether to go forward with their $2.6 billion buy of travel company Global Blue.
Stockholders of Far Point Acquisition Corp, or FPAC, are slated to meet virtually on Aug. 24 at 9 a.m. ET to vote on the combination, an Aug. 6 statement said. A Silver Lake-led group appears to be near victory in their efforts to push through the $2.6 billion Global Blue merger with FPAC.
SPACs have been popular with investors this year, and were the method companies including
(SPCE) went public. But they don’t always go as smoothly as planned.
The transaction has been in process since January when FPAC, a blank-check company backed by Dan Loeb’s Third Point and former NYSE President Thomas Farley, agreed to pay $2.6 billion to merge with Global Blue. Silver Lake and
own Global Blue. Retail and travel companies have been some of the most impacted by the Covid-19 pandemic, which caused travel all over the world to slow. Global Blue, of Switzerland, provides tax-free shopping for tourists. In May, Far Point decided to oppose its $2.6 billion buy of Global Blue, claiming that the pandemic was having a “significant negative impact on Global Blue’s financial condition, revenues and results of operations.” It encouraged investors in the SPAC to vote against the merger, something that would effectively kill it.
Negotiations have gone on for several weeks. Silver Lake, to get the deal done, made a number of concessions. This included giving up a 154 million euro ($175 million) dividend, agreeing to convert 50 million euros ($57 million) in convertible preferred stock to common stock and the private-equity firm also offered to hold back 18 months of proceeds that Global Blue could draw on in the form of $75 million in convertible debt.
On Aug. 15, Far Point Acquisition Corp, Silver Lake and Third Point entered into agreements that paved the way to close the merger. Third Point has agreed to fund $61 million into escrow to satisfy a portion of its obligations under the forward purchase agreement. Third Point reiterated its commitment to vote its 25% stake in favor of the merger. FPAC has also agreed to no longer use the pandemic to claim that closing conditions for the Global Blue deal haven’t been met, the SEC filing said. (The Far Point-Global Blue merger agreement contains language that limits the buyer’s ability to use the material-adverse-effect clause to get out of the deal. )
To approve the merger, the Silver Lake-led group needs only 50.1% of shareholders to vote in favor of the deal. It appears close to getting that.
Third Point, Dan Loeb’s hedge fund, is the biggest shareholder of FPAC with nearly 25%, according to an SEC filing. That 25% has already committed to vote in favor of the merger with Global Blue. Silver Lake acquired 12% of FPAC in May. Glazer Capital has 10.2% and is in favor of the transaction, Barron’s has learned. In all, this comes to 47%. It only needs roughly 4% more to clinch the deal.
Dan Loeb, as Far Point’s founder, holds 20% of FPAC, the SEC filing said. (Loeb is CEO and chief investment officer of Third Point.) Several other investors also own stakes. They include Anchorage Capital Group, Sculptor Capital, BlueCrest Capital Management and Basso SPAC Fund, which each have roughly 5%.
Executives for Silver Lake, Partners Group, FPAC, Third Point, and Anchorage declined to comment. Sculptor Capital, BlueCrest Capital Management, Basso, Global Blue and Manulife did not return calls or messages for comment.
Write to Luisa Beltran at [email protected]