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It’s not just Wall Street: bankers gear up for Spac boom in Europe

The boom of the so-called special purpose acquisition companies (Spacs) in the US has barely caused a ripple in Europe as dealmakers targeting companies in their home markets have tapped US investors for funds.

That changed last week when former UniCredit chief executive Jean Pierre Mustier teamed up with LVMH founder, Bernard Arnault, to launch a special purpose acquisition vehicle focused on financial services’ firms, raising hopes that the $100bn Spac boom which has taken Wall Street by storm has finally crossed the Atlantic.

Mustier joins a growing list of some of the best known names in European banking to launch Spacs, including former Credit Suisse chief executive Brady Dougan, ex-Barclays dealmaker Makram Azar, former London Stock Exchange boss Xavier Rolet and Deutsche Bank’s ex-investment bank chief Garth Ritchie. However, they have all raised money on US exchanges, even as some target European acquisitions.

A record $78.2bn was raised in the US via Spac IPOs last year, with a further $24.1bn raised so far in 2021, according to data provider Refinitiv. However, in Europe, Spacs, which raise equity through an initial public offering and then search for private companies to buy or merge with, mustered just $132m.

Guinea pig

Gary Quin, a former senior adviser at Credit Suisse who is now chief executive of $379.5m Spac North Atlantic Partners, which is listed in New York but targets European acquisitions, said investment banks in London were advising them to “lead the charge” by raising funds in Europe.

“I really didn’t want to be someone else’s guinea pig for a structure, which, if successful, they would claim as their own,” he said. “Equally, we didn’t want to spend 50% of the limited time that we would have with investors explaining the structure and on market education, whereas in the US there’s a depth and liquidity, and we never had to explain the structure.”

Azar, who unveiled his $300m Spac Golden Falcon Acquisition Corp in December, added: “Right now, US listings are much more attractive for companies looking to access capital markets. A key factor for this is that the US is home to the deepest pool of capital and most liquid capital markets.”

But the Spac run by Mustier and former Bank of America investment banking boss, Diego De Giorgi, called Pegasus Europe and backed by Tikehau Capital and Financière Agache, a holding company controlled by Groupe Arnault, shows Wall Street’s hottest trend has finally made its way to Europe.

The first listing in Europe this year by a blank cheque company took place in Amsterdam on 12 February when ESG Core Investments raised €250m to buy companies focused on the environmental, social and governance Space. This follows 2MX Organic, Paris-based Spac unveiled in December by former Lazard banker Matthieu Pigasse and telecoms executive Xavier Niel, which is seeking to raise up to €300m.

“Spacs are coming to Europe,” said Giacomo Ciampolini, head of Emea…

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