The Elliott fund, owner of AC Milan, is working to raise over $1 billion to finance a Special Purpose Acquisition Company (SPAC). It is essentially a company with the objective of investing in one or more existing operating companies.
The SPAC have a purpose very special: once made (by one or more promoters) collect funds on the capital market through an IPO, with the aim of integrating through a business combination with a company (target) bringing it to the next listing on the stock exchange.
Assuming Elliott moves forward, it could use the proceeds to buy a sizable company—potentially worth double-digit billions based on the targets similarly sized blank-check companies have agreed to combine with, as reported by Wall Street Journal.
Among the characteristics of the SPACs, the possibility of being able to raise capital "in the dark" without having to specify in advance the final destination of the investment.
SPACs are empty shells that raise money with the sole purpose of looking for a target to merge with and in the process take public. They have exploded in popularity because they offer a lucrative shortcut to the public markets. So far this year, at least 116 SPACs have raised $35 billion, putting the market on track to blow through last year’s record of over $80 billion, according to SPAC Research.
