Primary markets in the United States are witnessing a boom that is driven by Special Purpose Acquisition Companies (SPACs) that are also starting to reach Europe. How are SPACs different from traditional initial public offerings? Are SPACs a useful innovation or the latest financial tool for selling poorly performing securities to public market investors? Do disclosure or listing rules need to be reformed to take into account the SPAC phenomenon?
At the same time, dual-class share IPOs continue to increase in popularity, while also remaining controversial. The US markets continue to be a preferred venue for dual-class IPOs, also for foreign issuers. There are also SPACs that go public with a dual-class structure.
Responding to these developments, the United Kingdom is currently revising its listing rules to make the London markets more competitive globally. The EU has published a capital market union action plan that aims to make its primary markets more attractive, especially for small and medium-sized enterprises (SMEs). Several EU countries have also started to offer alternative control enhancing mechanisms (CEMs) like non-voting shares or tenure voting (“loyalty shares”).
Antonio Coletti, Partner, Milan
Chris Horton, Partner, London
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