1/ $TPGY A few thoughts on the 8-K dropped after hours today.
DEAL RISK is why pre-close SPACs trade at a discount to peer valuations. This is why some long only funds wait until a deal is effective to buy. A deal is never done until it's done. Global Blue anyone?
DEAL RISK is why pre-close SPACs trade at a discount to peer valuations. This is why some long only funds wait until a deal is effective to buy. A deal is never done until it's done. Global Blue anyone?
2/ $TPGY Carveout transactions are notoriously complex. When you're taking a division public, trying to separate CLEAN financials from the parent can be very difficult. Add on top that EVBox is European: translating IFRS to GAAP accounting adds more complexity!
3/ $TPGY However, I don't think it's just a matter that the audit is going to take longer. There's something more material here at play that concerns TPG to the point where they are asking for a price cut and Engie is unwilling to accommodate.
4/ $TPGY It seems that the buyer and seller are at an impasse and playing chicken. It's in neither parties' interest to abandon the deal given the positive market receptivity. Engie would be foolish to have to seek another sponsor and be tainted from having prior deal collapse.
5/ $TPGY would also be foolish in walking given how much investors like EVBox, especially in this environment. While TPGY has until 10/9/22 to get a deal done, finding a new deal will require $ and lots of effort in a much more competitive SPAC landscape.
6/ $TPGY has until 5/28 to unilaterally extend the out date to 9/6, which should be plenty of time to hammer out new terms and eventually ask shareholders for an extension to close. I would be SHOCKED if they didn't at least extend that date for option value.
7/ $TPGY At this point we don't have much information to go on except that TPG is pushing for a price cut to "cure" whatever issues are lurking under the covers. If the stock gets to the mid $10s and warrants mid $1s... I think that might be a decent bet to take.
8/ $TPGY As a former M&A banker and event driven investor who's seen many of these situations in the past: MOST OF THE TIME THESE ISSUES CAN AND DO GET RESOLVED BY A PRICE CUT. It'll be interesting to see how this one plays out. Good luck and stay safe!
9/ $TPGY I'll add that a price cut (lower valuation) will benefit shareholders. However the key question is why is TPG pursuing one and will a reduction in valuation fully offset whatever concerns TPG?
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