Has the SPAC boom had its time?

The Q1 2021 boom in SPAC IPOs in the US (during which $100bn worth of blank cheque companies were listed) appears to be on the decline as investors have been pulling out in their droves. Investors are increasingly seeking to redeem their shares, in light of the SEC's increased scrutiny into market disclosures, and historical poor performance, with the average redemption rate during Q3 2021 at 52.4%, from just 10% in Q1 2021. This has led to a number of SPACs being left with very little cash at the time of acquisition of the target, triggering an increase in the reliance on PIPEs to ensure the minimum cash requirement for the acquisition is met.

SPACs have been few and far between in the European market, not least in the UK as the FCA's Listing Rules have traditionally been seen by sponsors as being too restrictive. However, following the UK Listing Review's recommendation that changes be made to the Listing Rules in order to strengthen the UK's position as a leading global financial centre, the FCA has recently published its final proposed changes to the Listing Rules which seek to bring the UK closer in line with the US. 

It remains to be seen whether the UK will experience a SPAC listing boom as investors rollover into UK targets in light of the relaxed rules, or whether these changes may be a little too late...