A Special Purpose Acquisition Company (SPAC) is a company with no operational activities of its own, which raises funds from investors with the aim of identifying a target company and carrying out a business combination with it. This Master’s thesis outlines how it operates and analyses the advantages and risks of this method of going public. It focuses on the conflict of interests between sponsors and public investors, the dilution of their shareholdings, the right to redeem shares, and the impact of redemptions on the funds remaining with the target company following the business combination.
The comparative law section examines the legal frameworks of the United States, the Netherlands, Italy and Spain. The comparison shows that the characteristic mechanisms of a SPAC can be provided for by general company law, constitutional documents, stock exchange rules or specific statutory provisions. Specific statutory regulation is therefore not necessary if the legal framework allows a SPAC to operate in accordance with its characteristic structure whilst at the same time ensuring adequate protection for investors.
The study concludes that a SPAC can offer individual target companies a suitable alternative route to listing on the stock exchange, but is not suitable for every company. Its establishment is not prohibited under Slovenian law, but the current regulatory framework makes it difficult to implement certain characteristic mechanisms. Above all, adjustments to specific rules would be required; however, the actual implementation of SPACs in Slovenia would be unlikely due to the small size of the domestic capital market.
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