Opportune Partners Managing Director James Hanson describes the SPAC process as a “low-risk way to potentially back a sponsor,” MarketSCale reports.
Hanson explains that a SPAC is an attractive means for going public over a traditional IPO because of the speed to market. Taking a private company public via a traditional IPO can take two or three years. A de-DPAC transaction, however, can take three to four months. Hanson says that shareholders risk leaving money on the table with an IPO.
A court ruling from 1983 stated that if there is a controlling conflict, then the decision process had to be held to a higher standard. The verdict called it “entire fairness.” There had to be fairness from a price standpoint and fair dealing. This case created a broader legal standard.
Hanson emphasizes that a “fairness opinion” is a great way to protect against claims of conflict. A fairness opinion is an objective evaluation from an independent third party. It includes due diligence and exploration of the transaction in detail.
“Since 1985, fairness opinions have become the gold standard in protecting against claims of conflict of interest,” Hanson says. Read more.
