Richard Branson, the billionaire visionary and founder of Virgin Group, is seeking to secure at least $460 million to set up a new special purpose acquisition company, and become the latest tycoon to join the mad scramble for a bailout to stay in the business.
Branson is calling on investors to acquire shares in the SPAC with the objective of later procuring an existing business using the money produced from an initial public bid. In a filing Wednesday with the Securities and Exchange Commission, VG Acquisition Corp disclosed it planned to sell 46 million units at $10 each on the New York Stock Exchange, Bloomberg reported.
SPACs have recently become trendy on Wall Street as a method to search for dynamic investor demand for public shares, with prominent lenders creating their own. Private businesses usually link up with the SPAC and go public through a "reverse listing." SPACs, also referred to as blank-check companies, are created exclusively for buying another company and listing it on the stock market.
Branson is seeking to expand his Virgin Group reach after the coronavirus crisis has hurt sizeable portions of his company. For instance, his airline business, Virgin Atlantic, filed for bankruptcy protection in the U.S. last month. Virgin Group said it is looking for companies that operate in consumer-facing markets in the U.S. and Western Europe.
Virgin Group pointed out that it hadn't yet decided which company it wants to acquire. However, it said it will "search for targets that operate in consumer-facing industries in the U.S. and Western Europe," Markets Insider reported.
Chief Executive Josh Bayliss and chief financial officer Evan Lovell will lead the VG Acquisition, with Branson listed as the founder and having a 19 percent stake. Branson will also invest roughly $11 million in exchange for the right to acquire stocks at a fixed price later on.
Virgin Galactic listed on the NYSE in October last year with a market cap of $2.9 billion through consolidation with Social Capital Hedosophia Holdings, a blank-check firm founded by Chamath Palihapitiya, a former executive at Facebook.
