Special Purpose Acquisition Corporations (SPACs) On The TSX

The Toronto Stock Exchange (TSX) has adopted rules that will permit special purpose acquisition corporations (SPACs) to be listed on the TSX. The new rules became effective on December 19, 2008. The final rules are embodied in amendments to Part X of the TSX Company Manual. The proposed rules and the final rules were reported on, respectively, in Volume 3:4 of McCarthy Tétrault Co-Counsel: Business Law Quarterly and in our e-Alert.

A SPAC is a public shell company, created and led by an experienced management team that raises equity in an initial public offering (IPO) to acquire an operating business.

In order to create a SPAC and complete an offering on the TSX, a SPAC must file a listing statement with the TSX and clear its IPO prospectus with Canadian securities regulators. The SPAC must raise a minimum of $30 million (through the issuance of common shares or units) at a minimum offering price of $2 per security. If units are issued, each unit of the SPAC may