Before listing on the stock exchange (the offer)
A SPAC is established by a number of initiators ('sponsors' or 'founders'). They set up a SPAC to raise capital to buy all or a part of a non-listed company. These founders are often experienced persons from the business services sector. Once the company has been incorporated, institutional investors will be able to buy 'units' from the SPAC, consisting of a share and a warrant or a fraction thereof. The listing on the stock exchange will also take place at that time: the SPAC IPO.
Listed on the stock exchange, but before acquisition of the target company
At this stage, the SPAC is a listed company. Securities (units, shares and warrants) can be traded on the stock exchange. In this phase, a SPAC is still a ‘shell company’ looking for a company to acquire (fully or partially). SPACs usually have 24 months to find a suitable target. If the initiators are unable to find a target within that period, the SPAC will be dissolved. In principle, the holders of shares will then have their investment refunded.
After acquisition of the target
The initiators of the SPAC have found an acquisition target. If shareholders of the SPAC respond positively, the target can obtain the listing in collaboration with the SPAC. Shareholders of the SPAC who disagree with the acquisition have the option to not participate in the deal. In principle, these dissenting shareholders have their initial investment refunded. After the acquisition, the SPAC is no longer a ‘shell company’, it is a listed company with business activities. In this stage, a share in a SPAC is no longer different from a share of another listed company.