SPACs cause headache for Emirates bourses struggling to attract listings | Reuters
Firms in the United Arab Emirates are increasingly seeking fast-track listings in New York through mergers with special purpose acquisition companies (SPACs), posing a fresh challenge to local bourses which are struggling to revive a moribund IPO market.
A burgeoning dealmaking instrument, SPACs raise money to acquire a private firm with the purpose of taking it public, allowing the target to list more quickly on share markets than via traditional initial public offerings.
Such lightly regulated vehicles are currently not permitted on UAE bourses, however, encouraging companies to seek out alternative venues and putting local equity markets under pressure to change regulations to cash in on the trend.
After a strong run of acquisitions in the United States, SPACs are looking at emerging markets, with a focus on Asia. But there are potential targets in the Middle East and the UAE in particular, market participants say.
“SPACs are speaking to us about companies here they’d like to merge with to go public,” said Fawad Tariq-Khan, head of investment banking at Dubai-based SHUAA Capital.
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