Saturday, March 25, 2006

Blank Check IPOs: Time Running Out?

The blank check phenomenon is as rampant as ever. "Over the past two years, "blank-check" companies have raised more than $3 billion through initial public offerings, promising investors to go out and find attractive acquisition candidates." But, as Retuers says, some of these blank check companies have been silent on the deal front, and if they don't do one soon, they may have to return the money to investors. Therein lies the conflict for management. Why give money back to investors? Why not just do a dud deal and get paid to run a company? That could be a scary situation for retail investors in blank check companies. Of course the company could do a blockbuster deal like Services Acquisition Corp.'s acquisition of Jamba Juice (announced last week).

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