Monday Evening Brief: Churchill Capital and Pensare

news update

Monday Evening Brief: Churchill Capital and Pensare

Apr 22, 2019 INTEL by Kristi Marvin

Churchill Capital Corp.

Churchill Capital Corp. announced they have set the date for their special meeting to vote on their business combination with Clarivate Analytics Plc. The shareholder vote will take place on May 13, 2019, with a Record Date of April 10th.  Shareholders wishing to redeem can elect to do so up to two days prior to the vote.

Although, it’s hard to imagine why anyone would want to redeem when the share is currently trading close to $14.00.  (This is the right way to close a combination.)

Pensare Acquisition Corp.

Pensare Acquisition Corp., which is scheduled to vote on their extension on April 26th, to move their completion deadline to August 1st, announced that they have agreed to contribute $0.033 for the month of May for each share of Pensare’s common stock that is not redeemed in connection with the extension vote.  To clarify, the $0.033 per share contribution is only for the calendar month of May.

The $0.033 contribution will increase the pro rata portion of the funds available in the Trust Account from approximately $10.32 to approximately $10.36 per Public Share. If the Extension is implemented, the Company’s sponsor will make the Contribution on or before May 10, 2019.

Here’s where it gets interesting….the Company stated that they will announce in May (post-extension vote) if they will make additional contributions to the Trust Account after that month.  Presumably for the months of June and July. However, If the Company’s sponsor determines not to make additional contributions to the Trust Account, they will offer public stockholders the right to redeem for their pro rata portion of the funds then available in the Trust Account.

Either way, stockholders will be able to redeem in June if Pensare decides to not make additional contributions, but this feels like Pensare is trying to hedge their bets and gauge investor sentiment through the vote.  Meaning, if there are a significant amount of redemptions at the extension vote on April 26th, perhaps both Pensare and TPx might decide the deal doesn’t make sense anymore.  And this way, they both can cut and run without having to commit to making contributions in June and July. Regardless, Pensare just gave themselves some options.  It also doesn’t sound like either party in this transaction is fully committed.