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De-SPACing: Tattooed Chef Inc.
Allayannis, George (Yiorgos); Sesia, Aldo Case F-1996 / Published December 15, 2021 / 20 pages.
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Product Overview

In late October 2020, hedge fund analyst Maya Botti was evaluating the decision to vote for the proposed merger of Forum Merger IIa special purpose acquisition company (SPAC), with Ittella International, a plant-based food company; if the SPAC shareholders voted in favor of the merger, Botti also had to recommend that the hedge fund’s leadership redeem the hedge fund’s shares in Forum II, sell the shares in the open market, or continue as shareholders of the merged company. The case provides an opportunity to discuss SPACs, including their structure; key players and participants in them; and their risks, rewards, and potential pitfalls. The case also provides an opportunity to discuss differences between regular IPOs and to compare and contrast IPOs to SPACs. This case can be taught in a second-year elective course on capital markets, financial institutions, and markets or capital raising. It can fit in a module that explores financial engineering and instruments such as collateralized debt obligations or that discusses ways of going public and contrasting them with regular IPOs.


Learning Objectives

To discuss the structure of SPACs. To analyze the various key players in SPACs and their incentives. To understand the risks of SPACs for the various stakeholders. To evaluate the potential merits of going public via a SPAC. To examine a specific merger of a SPAC with a food company and a potential strategy for a hedge fund invested in the SPAC.

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  • Overview

    In late October 2020, hedge fund analyst Maya Botti was evaluating the decision to vote for the proposed merger of Forum Merger IIa special purpose acquisition company (SPAC), with Ittella International, a plant-based food company; if the SPAC shareholders voted in favor of the merger, Botti also had to recommend that the hedge fund’s leadership redeem the hedge fund’s shares in Forum II, sell the shares in the open market, or continue as shareholders of the merged company. The case provides an opportunity to discuss SPACs, including their structure; key players and participants in them; and their risks, rewards, and potential pitfalls. The case also provides an opportunity to discuss differences between regular IPOs and to compare and contrast IPOs to SPACs. This case can be taught in a second-year elective course on capital markets, financial institutions, and markets or capital raising. It can fit in a module that explores financial engineering and instruments such as collateralized debt obligations or that discusses ways of going public and contrasting them with regular IPOs.

  • Learning Objectives

    Learning Objectives

    To discuss the structure of SPACs. To analyze the various key players in SPACs and their incentives. To understand the risks of SPACs for the various stakeholders. To evaluate the potential merits of going public via a SPAC. To examine a specific merger of a SPAC with a food company and a potential strategy for a hedge fund invested in the SPAC.