UPDATE 2-Gabelli blank-check lowers planned IPO to $125 mln
(Adds analyst comment, info on last SPAC to price)
NEW YORK, Nov 3 (Reuters) - The blank-check company being sponsored by asset manager Gamco Investors Inc (GBL.N) has cut its planned proceeds from an initial public offering to $125 million from $200 million, according to a regulatory filing.
Gabelli Entertainment & Telecommunications Acquisition Corp, the blank-check company, hopes to use the funds to acquire a media or telecommunications company or a utility. It initially filed for its IPO in August 2008, and at the time estimated it would raise $200 million.
"The number one reason is that the markets are horrible," said Neil Danics of SPAC Analytics, a research service. "The reduced size reflects that there is less cash available for this type of deal."
The firm, a shell organization also known as a special purpose acquisition company (SPAC), plans to sell 12.5 million units, which includes one share and one warrant, for $10 each. According to the filing, its chairman, Mario Gabelli, plans to buy about 1.24 million units from the underwriters for $10 apiece.
By buying about 10 percent of the units to be issued, Danics said, Gabelli is looking to increase the probability that shareholders would approve of any acquisition the SPAC would make.
Gabelli founded Gamco, which has stakes in a number of major media companies, including Cablevision Systems Corp (CVC.N), and Time Warner Inc (TWX.N) and Viacom Inc (VIAb.N).
Businesses acquired by SPACs become publicly traded after shareholders approve the transaction. Typically, a SPAC has two years to complete an acquisition. Otherwise, investors get their money back.
After an active year in 2007, when 65 SPACs went public in the United States, raising $11.6 billion, only 14 have issued stocks and warrants, raising $3.6 billion so far in 2008, according Thomson Reuters data.
The last SPAC to launch an IPO on a U.S. exchange was Chardan 2008 China Acquisition Corp (CACAU.O), which raised $55 million in August.
Gabelli Entertainment & Telecommunications Acquisition said the IPO would be underwritten by Citigroup and Ladenburg Thalmann & Co, with Citigroup having the option to buy an additional 1.875 million units. (Reporting by Phil Wahba; editing by Jeffrey Benkoe)
