Gerry Cardinale and Billy Beane are set to begin their search for a professional sports franchise after their new special purpose acquisition company (SPAC) raises US$575 million in its initial public offering (IPO) in under a month, with Hedge fund billionaire taking a nearly 8 per cent stake in Redball Acquisition Corp.
Cardianle, founder and managing partner of RedBird Capital Partners, and Oakland A’s executive Beane formed RedBall Acquisition Corp and filed an initial public offering (IPO) at the end of July for a US$500 million IPO to help purchase a professional sports franchise. However, due to demand, an additional US$75 million was raised as underwriters exercised an option to sell an additional 7.5 million.
Trading of stocks began last week on August 13 operating under the name ‘RBAC.U’, while investment bank and financial services firm Goldman Sachs acted as the sole book-running manager for the offering. In the space of four days, the IPO raised a better-than-expected initial public offering of US$575 million, with 57.5 million unites sold at US$10 per share.
Isreal 'Izzy' Englander, founder, chairman and chief executive of New York-based hedge fund Millennium Management LLC and one of the world's richest billionaires, has taken a 7,8 per cent stake in Redball Acquisiton Corp.
In a move showing the continued interests in the sports and entertainment industry among the financial and investment communities, Englander's Millenium Management was shown in a new filing with the US securities & Exchange Commission to own 4.5 million shares, worth more than US$45 million.
Englander formed Millennium Management in 1989 and over the last three decades has successfully grown the firm into one with US$45.4 billion now under management and more than 3,200 employees/#.
RedBall now have 24 months to purchase a company in any industry, though the intention is to purchase a professional sports franchise“While the company may pursue an acquisition in any industry or sector, it intends to focus on businesses in sports, media, and data analytics sectors, with a focus on professional sports franchise, which complement the management team’s expertise and will benefit from its strategic and hands-on operational leadership,”.
If the money raised through the IPO is not used within the next 24 months it will be returned to investors.
They are keen to acquire a company who they feel would “benefit from our extensive networks and insights."
RedBall boast an impressive management board that would help any sports team. Which includes Alec Scheiner, former president of Cleveland Browns, and Luke Bornn, vice president of strategy and analytics for Sacramento Kings.
RedBird have all ready begun operating in the sport industry with the recent purchase of an 85 per cent in French football club, Toulouse F.C.
SPACs such as Redball have become increasingly common in finance circles, with SPAC Research estimating they have raised more than US$19 billion thus far in 2020. The instrument was notably used in a three-way merger earlier this year that turned prominent gaming operater DraftKings into a public company. The popularity of SPACs stem in large part from the lack of downside risk for investors, with shareholders able to recoup their funds if the SPAC is not able to complete a suitable business acquisition.
Author: James Parker