Melco Resorts & Entertainment (NASDAQ:MLCO) Chairman and CEO Lawrence is joining the special purpose acquisition company (SPAC) parade in the US. He is filing plans to raise up to $172.5 million in an initial public offering (IPO) for Black Spade Acquisition.
Plans for the blank-check entity were revealed in a Form S-1 filing with the Securities and Exchange Commission (SEC). Black Spade is targeting $150 million in proceeds from the IPO, but that figure could jump to $172.5 million if underwriters exercise their full overallotment. The shares will trade on the New York Stock Exchange under the ticker “BSAQ” while warrants will bear the symbol “BSAQW.”
While we may pursue an initial business combination opportunity in any industry or any region, we are focused on identifying a business combination target that can benefit from the extensive collective network, knowledge and experience of our founder and management team that is related to or in the entertainment industry, with a focus on enabling technology, lifestyle brands, products, or services and entertainment media,” according to the regulatory filing.
Hong Kong-based Melco is one of the largest Asian gaming companies with venues including Altria Macau and City of Dreams on the Cotai Strip and Manila, among other destinations.
In the regulatory filing, Black Spade makes clear it hasn’t identified a specific merger target as of yet. But given Ho’s background and the recent flurry of deals involving SPACs and gaming companies, it’s reasonable to expect investors will ponder if the new blank-check will go in that direction.
Among the recent transactions involving gaming operators and SPACs are Wynn Resorts (NASDAQ:WYNN) declaring its intent to bring its Wynn Interactive unit public through a blank-check merger, Betway parent Super Group revealing a marriage with Sports Entertainment Acquisition Corp. (NYSE:SEAH), and internet casino and online sports wagering operator Codere Online merging with special purpose acquisition company (SPAC) DD3 Acquisition Corp. II (NASDAQ:DDMX), among others.
However, Black Spade is expressing an interest in potentially merging with companies in Asia – a region where online casinos and sports wagering — two prime hunting grounds for SPACs — are mostly prohibited.
“We believe China’s growing middle-class population of more than 350 million people, with its rapidly evolving consumption patterns and increasing spending power, will continue to shape multiple industries in Asia and across the globe,” according to Black Spade’s S-1 filing.
Blank-check companies encountered some headwinds earlier this year. But the vehicle remains popular in the gaming arena. Operators are embracing SPACs as an avenue for quickly bringing to market iGaming and sports wagering businesses, unlocking value for investors in the process.
Still, regardless of whether it pursues gaming interests or not, Black Spade faces fierce competition to seal a transaction. There are currently 422 SPACs searching for a deal, according to SPAC Track. Blank-check companies have two years to find a merger partner or be forced to liquidate and return capital to shareholders.
“We are not limited to a particular industry and geographic region, and may consummate a business combination with a target business in any industry or any region if we believe the business combination is attractive to our company and stockholders,” said Black Spade in the SEC filing.