Private equity firm Silver Lake disclosed a string of concessions on Tuesday it offered to push through the $2.6 billion sale of its Swiss payments company Global Blue to blank-check acquisition company Far Point Acquisition Corp.
The deal has been in doubt since May, when Far Point, which is backed by Daniel Loeb’s hedge fund Third Point LLC and former New York Stock Exchange President Thomas Farley, changed its recommendation to shareholders and asked them to vote against the deal. A date for the vote has not yet been set.
Far Point raised $550 million through an initial public offering in 2018 to buy an unspecified company, and needs the blessing of the majority of its shareholders to complete the proposed Global Blue deal.
Far Point said it has changed its mind after signing the deal in January because of the negative impact of the coronavirus outbreak on Global Blue, which processes payments made by international travelers on luxury good purchases at airports and has been hit by the global decline in air travel.
Silver Lake, which owns Global Blue together with Partners Group Holding AG, in May also amassed a 12% stake in Far Point.
Silver Lake said in a regulatory filing it was offering concessions collectively worth more than $300 million.
Under the concessions, Silver Lake said, Global Blue would not issue a pre-transaction dividend of 154 million euros ($176 million), and it would convert 50 million euros of its preferred shares in the post-merger company to ordinary shares, leaving more money for Far Point shareholders. It also offered to give Global Blue a funding facility for $75 million.
Far Point declined to comment, while Third Point, which is contractually obligated to vote its 25% stake in Far Point in favor of the deal, did not immediately respond to a request for comment.
Were Far Point shareholders to vote down the deal, they could still redeem their shares for the $10 they paid for each during its IPO. But warrants they were awarded during the IPO would become worthless unless Far Point clinches another acquisition by Sept. 14 or requests an extension.
Were the deal to be voted through, Third Point would be on the hook to redeem up to $430 million worth of Far Point stock from shareholders seeking to cash out.
Source: Reuters.com