Friday Happy Hour Update: STNL, OPES, INSU + Two New SPACs

In no particular order, the below is a summary of Friday’s SPAC news.

SENTINEL ENERGY SERVICES, INC. (STNL)

Sentinel Energy Services, Inc. (STNL) filed a definitive proxy this evening for their extension vote to be held on November 6, 2019.  At this extension vote, Sentinel will be asking shareholders to vote on moving their current deadline from November 7th, to May 31st, 2020, or August 31st, if STNL has a definitive agreement or binding term sheet on file. However, Sentinel will NOT be offering any contribution to trust to shareholders who do not redeem.  By now, we all now what that means….redemptions ahead.

So what does this tell us… Well, for one, the fact that STNL is asking for so much time means that they are not close at all to announcing a combination.  Plus, the fact that they are not contributing any funds to trust and they are asking for at least six months, and potentially even nine months, means they know that by not offering a contribution to trust, it will result in a significant amount of redemptions.  So clearly, that’s what they want.  Remember, they are looking in an out-of-favor sector (Energy) and any acquisition they make will most likely need a big investment from a long-only sector investor that believes in the company and industry and that type of investment is usually best served via a new PIPE. However, it also means that they might need to make that investment especially sweet, which is typically not great for SPAC investors who bought at $10.00.  So it’s “clear the decks” and take out as many SPAC investors now since they probably won’t be happy with what STNL will needs to do going forward.  Plus, a smaller SPAC size means Sentinel has a bigger pool of targets to choose from.

Sentinel is in a tough spot.  This is, unfortunately, probably their best move.

OPES ACQUISITION CORP. (OPES)

We finally have some news on Opes Acquisition Corp. (OPES) tonight.  Opes filed a preliminary proxy to extend their completion deadline from November 15, 2019 to …..we don’t know.  It’s still blank. However, they’re extending! Not giving up!  Additionally, there are place holders for a contribution to trust for extending for shareholders who do not redeem, but we’ll have to wait for the definitive proxy to know just how much they’re willing to add per share in order to extend.  However, the record date is October 30th, but shareholders can redeem up to two days prior to the vote, or November 13th.

INSURANCE ACQUISITION CORP. (INSU)

Joseph M. Scheerer, a member of the Board of Directors of Insurance Acquisition Corp., tendered his resignation from the Board and any committees of the Board upon which he served yesterday.  No replacement was mentioned.

TWO NEW IPO FILINGS

We also had two new IPO filings tonight.  They are the $100 million, healthcare-focused Amplitude Healthcare Acquisition Corp., being underwritten by BMO Capital Market and SVP Leerink, and the $125 million Software Acquisition Group, Inc., with B. Riley FBR as sole book-runner.  More to come on both in future posts.