And meanwhile in the UK, activism meets SPAC

Special purpose acquisition companies (SPACs) are a common type of investment fund used in the US, but they also exist in the UK and can be found either on AIM or with a standard listing on the London Stock Exchange (LSE). There are some distinctions between a US and UK SPAC but the intent is the same: raise the cash off the back of the track record of the managers and find targets to buy, normally in control transactions. In 2017, there were 15 SPACs in the UK which raised £2.2bn but that was an unusual year and still pales in significance compared to the $6.8bn which the FT is reporting was raised so far in 2019 for US SPACs.

An interesting twist on the SPAC in the UK recently was the listing last year of an activist SPAC, Trian Investors 1 Limited on the Specialist Fund Segment of the Main Market of the LSE. This SPAC raised £270m (including the equivalent of $50m from Trian) to make substantial minority investments, alongside other Trian managed funds, in high quality, but undervalued and underperforming companies listed in the US or the UK and then to deploy a highly-engaged strategy to deliver value but not a takeover under the UK Takeover Code.

The Trian SPAC will only invest in one company at a time and it will be interesting to see what company Trian targets first with its SPAC. One of Trian's historic successes in the UK market was its investment into Cadbury Schweppes plc which led to the US spin off of the Snapple drinks division in 2008.