Goldman Sachs enters blank check arena

Financial News Online US ^ | 03/25/08 | Stephanie Baum

[TigerLikesRooster]

Goldman Sachs enters blank check arena

Stephanie Baum

25 Mar 2008

Goldman Sachs is underwriting its first blank check deal as the market for these acquisition vehicles continues to grow and evolve.

Liberty Lane Acquisition Company registered for a $350m (€224.3m) initial public offering.

While it will make 35 million units available at $10 each, Liberty Lane will differ significantly from previous blank check agreements because its initial stockholders' shares of common stock will represent 7.5% of the total outstanding shares of common stock instead of the 20% of outstanding shares that has been typical for previous deals, according to documents filed with the US Securities and Exchange Commission.

Blank check and special purpose acquisition companies are shell companies that use public money to make acquisitions.

The move reflects a trend of Spac owners to reduce their stakes in their acquisition vehicles in order to make them more attractive to shareholders.

This higher exercise price reduces the potential dilution represented by the initial warrants, which allow buyers to acquire additional shares in return for more cash. The initial warrants are 33% higher than is typical for such deals in order to reduce the dilution of share value and improve the prospects of a future transaction, according to the filing.

Liberty Lane will target companies in all industries except the life sciences sector.

Paul Meister, the chief executive of Liberty Lane and Paul Montrone, the chairman, both worked in senior level positions with Fisher Scientific before it was acquired by Thermo Electron in May 2006 for $10.6bn. The company has since been renamed Thermo Fisher Scientific. They have non-compete agreements with Fisher that do not expire until April 2010 for Meister and November 2009 for Montrone.

Skadden Arps Slate Meagher & Flom provided legal advice to the Spac sponsors of the deal while Cleary Gottlieb Steen & Hamilton provided legal advice to Goldman Sachs on the deal.

There have been 33 Spac public offerings valued at $6.1bn filed for the year to date, according to investment banking research provider Dealogic.

[TigerLikesRooster]

Ping!

[BigLittle]

Ah, Goldman Sachs, the team that ran Enron up the flag pole.

[BGHater]

Ah, yes, Goldman Sachs. Goldman Sachs
Goldman Sachs is one of Wall Street’s most prestigious investment banks. Like others in the securities industry, it advises and invests in nearly every industry affected by federal legislation. The firm closely monitors issues including economic policy, trade and nearly all legislation that governs the financial sector. It has been a major proponent of privatizing Social Security as well as legislation that would essentially deregulate the investment banking/securities industry. In August 2002, following months of corporate scandals, congressional investigators launched a probe into whether stock analysts at Goldman Sachs issued biased investment advice in order to protect corporate clients. The firm tends to give most of its money to Democrats. Goldman Sachs' former chief executive, Jon Corzine, served in the U.S. Senate as a Democrat from New Jersey. He's now the state's governor.

Election Cycle	Total Contributions	Dems	Repubs	% to Dems	% to Repubs
2008	$3,349,071	$2,409,006	$940,065	72%	28%
2006	$3,492,716	$2,166,411	$1,292,355	62%	37%
2004	$6,426,438	$3,963,753	$2,444,185	62%	38%
2002	$3,510,035	$2,289,040	$1,219,995	65%	35%
2000	$4,432,977	$2,764,185	$1,662,292	62%	38%
1998	$1,935,166	$1,224,252	$681,914	63%	35%
1996	$1,816,563	$997,747	$816,316	55%	45%
1994	$1,026,235	$562,760	$462,675	55%	45%
1992	$1,660,310	$908,295	$751,515	55%	45%
1990	$717,621	$473,716	$243,905	66%	34%
TOTAL	$28,367,132	$17,759,165	$10,515,217	63%	37%

[Travis McGee]

Blank check and special purpose acquisition companies are shell companies that use public money to make acquisitions.

It's great when your CEO becomes the Secretary of the Treasury! How convenient!

[Wolfie]

Free Market Capitalism (”Don’t regulate me, bro!”) works so much better when you can use taxpayer money.

[ex-Texan]

This is just the tip of the iceberg . . .

Goldman Sees $1.2 Trillion Global Credit Loss

But there is more coming. Those $ 1.2 trillion in losses are all due to subprime Loans. There were other forms of reckless lending engaged in by Wall Street: Alt-A Loans, so-called 'Liar Loans' (or stated income loans), teaser rate loans and so-called standard loans made on hyper-inflated property values . . . Wow !

Just last week there was a report out of England saying that the total potential losses stand at over $ 516 Trillion. Report is posted here . . .

But never mind. There is nothing going on here. Time to move on, people.

'Greed is good,' say all lenders.

[ex-Texan]

California freefall: Home prices fell 26% in February

Excerpt:

JyatpencSigns of distress are piling up in the California housing market, where prices are falling at three times the national rate of decline.

--Statewide, median sales prices fell by a stunning 26% in February, with home prices dropping at a rate of nearly $3,000 a week, the California Association of Realtors reports. Further, the CAR says the Fed's interest rate-cutting campaign "will have little near-term direct effect on the housing market."

--In the San Fernando Valley, losing a home to foreclosure is now almost as common for families as buying a home. The LA Daily News: "During January and February, there were 1,084 foreclosures and 1,335 sales of houses and condos in Valley communities from Glendale to Calabasas, according to the San Fernando Valley Economic Research Center at California State University, Northridge."

"It's bad. It's really bad," market analyst Nima Nattagh told the Daily News. * * *

[nicmarlo]

It's great when your CEO becomes the Secretary of the Treasury! How convenient!

The shell game continues.

[M. Espinola]

Ah, our old friends at Goldman Sachs. What’s good for Goldman Sachs may not be in America’s interest.

[GOPJ]

Thanks for the ping.

[Travis McGee]

You bet.