Peltz jumps on "blank check" IPO bandwagon

By Shivani Singh and Lilla Zuill

BANGALORE/NEW YORK, Nov 2 (Reuters) - Activist billionaire investor Nelson Peltz on Thursday filed to raise up to $750 million in what could be the largest ever initial public offering by a "blank check" company.

Peltz's Trian Acquisition I Corp plans to use proceeds from its offering to "acquire a company with a fundamentally strong business that has been mismanaged or under managed," according to the filing with the U.S. Securities and Exchange Commission.

If Peltz's latest IPO succeeds, it would easily trump Texas businessman Tom Hick's Hicks Acquisition TOH.A, which raised $550 million in September -- the largest so far by a blank check company, according to data tracker Dealogic.

In August, another blank check company Liberty Acquisition Holdings had filed for a $750 million IPO.

Blank check companies, also known as special purpose acquisition vehicles, are formed for the sole purpose of acquiring other businesses.

They generally tap investors in the public markets prior to making acquisitions, and generally have an agreement to return funds to investors within a specified period if they fail to close deals.

Peltz, known for targeting the management of underperforming companies, has in recent months been in talks to buy No. 3 hamburger chain Wendy's International (WEN.N), which he has pressured to consider strategic alternatives.

His Trian Fund Management owned about 10 percent of Wendy's outstanding shares, according to an October regulatory filing.

He also has investments in a slew of other companies such as Cadbury Schweppes (CBRY.L), H. J. Heinz (HNZ.N), Tiffany & Co (TIF.N), Wendy's International (WEN.N), Chemtura Corp CEM.N and CBRL Group (CBRL.O).

Peltz made his mark ten years ago when he bought Snapple in 1997 for $300 million through his holding company Triarc Cos TRY.N and then sold the beverage group in 2000 for about $1.5 billion.

Investors who jump on board Peltz's new venutre, Trian Acquisition, will likely to do so in hopes of tapping into the gains Peltz generated with such deals as Snapple.

HOT COMMODITY

Blank check companies, which have only come into vogue in recent years, have courted controversy because they have no revenue or operating history -- just a management team promising acquisitions if the right opportunity presents itself.

After a slow start, these specialized offerings are now beginning to take off with almost $6 billion having been raised by blank-check IPOs so far this year, up from $3.4 billion last year, or about 15 percent of what mainstream IPOs raised in the first nine months of the year.

Blank-check offerings raised just $24 million in 2003, the first year they were floated to public investors, $480 million in 2004 and $2 billion in 2005, according Dealogic.

TRIAN IPO

Peltz, through Trian Acquisition I, expects to float 75 million units at $10 each. Each unit consists of one common share and one warrant. In exchange, every warrant holder will be entitled to buy a share for $7.50, exercisable in 2008, according to the SEC filing. Proceeds will be deposited with a trust, Trian said.

Underwriters, led by Deutsche Bank Securities Inc and Merrill Lynch & Co, have the option to buy up to 11.25 million units to cover over allotments.

Trian Acquisition has until 2009 to make an acquisition, or be liquidated and returns funds to investors, the filing said.

PLAYERS

Hicks Acquisition made headlines with its debut two months ago, and another high-profile blank check deal with giant European hedge fund GLG Partners is set to raise the profile for these types of offerings even more.

GLG, which is run by former Lehman Brothers and Goldman Sachs executives, is planning to go public on the New York Stock exchange via a reverse merger in a deal with another blank check company, Freedom Acquisition Holdings FRH.A.

GLG, which has more than $21 billion in assets under management counts Dubai's Istithmar, owner of tony Manhattan department store Barney's, and European private bank Sal. Oppenheimer as some of its largest investors.

Top underwriters, like Citi, Deutsche Bank and Merrill Lynch, have helped raised the profile for blank check offerings.