SoftBank launches Spac and may buy one of its own investments

SoftBank has filed to raise up to $604m for a special purpose acquisition company, saying the vehicle could acquire a business the Japanese conglomerate has previously invested in via its $100bn Vision Fund. 

The Spac, called SVF Investment Corp, is SoftBank’s attempt to capitalise on the investment enthusiasm for blank-cheque listings. The vehicle is sponsored by SoftBank Investment Advisers, the unit that manages its Vision Fund and which is run by Rajeev Misra, a former Deutsche Bank executive.

It would launch on the Nasdaq in New York, the company said on Monday.

SoftBank said in a regulatory filing that it would seek an acquisition in a “technology-enabled sector”, citing telecommunications, artificial intelligence and software as possibilities.

“We will use our deep experience in sourcing, due diligence and investment execution to identify and complete a combination with an exceptional business,” it said.

SoftBank said that it was not prohibited from combining the Spac with a company linked to its Vision Fund, but said it would obtain an independent opinion from advisers about whether such a transaction would be fair. 

SoftBank joins a number of other investment companies, such as private equity group Apollo Global Management and Bill Ackman’s hedge fund Pershing Square, that have sponsored Spacs this year and are now hunting for merger deals.

Some 235 vehicles have listed on US exchanges this year, raising a combined $74.8bn, according to data provider Refinitiv.

The phenomenon has come under scrutiny, with some critics charging going public via a Spac provides less transparency and higher costs than a traditional initial public offering. 

The launch of SVF Investment Corp came as SoftBank shares hit a 20-year high on Monday, driven by founder Masayoshi Son’s strategy of buying back shares with proceeds from selling portions of the group’s portfolio. 

The recovery marks a dramatic reversal in fortune from March when SoftBank shares crashed with the rest of the market on news that there would be global lockdowns to curb the spread of coronavirus. 

As the market cratered, SoftBank’s plans to list companies it had backed through its Vision Fund looked troubled. But the surge in technology-related stocks over the course of 2020 has lifted its fortunes and allowed SoftBank-backed companies including food delivery group DoorDash to list successfully via the IPO market. 

Opendoor, a SoftBank-backed online real estate start-up, debuted on Nasdaq on Monday after completing a $4.8bn merger with Social Capital Hedosophia II, a Spac set up by former Facebook executive Chamath Palihapitiya and UK investor Ian Osborne.

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