Richard Branson joins blank-cheque frenzy with US$400m deal

[NEW YORK] Richard Branson is the latest billionaire to join the blank-cheque listing party after he sold his space tourism business to one.

VG Acquisition filed on Wednesday to raise US$400 million in a special purpose acquisition company, or SPAC. The company plans to sell 40 million units at US$10 apiece, according to its filing with the US Securities and Exchange Commission.

The company said it would look at a host of businesses to target for a merger. The possibilities could be as varied as travel, financial services, music and renewable energy, it said.

Mr Branson, founder of the VG Acquisition, sold Virgin Galactic Holdings in October to a blank-cheque company started by Chamath Palihapitiya and venture capital firm Hedosophia in a deal that set off this year's SPAC listing spree.

Mr Branson and the management of VG Acquisition bought 11.5 million shares or 20 per cent of the shares outstanding for US$25,000 in a common payout known as founder shares or promote - a compensation to sponsors for finding a deal.

Investment heavyweights such as Bill Ackman have since set up their own SPACs. The US$4 billion initial public offering by Ackman's SPAC in July is the largest ever by a blank-cheque company.

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Buyout firm Apollo Global Management also filed on Wednesday to raise US$750 million through a blank-cheque company, Apollo Strategic Growth Capital.

Credit Suisse Group is leading the offering by VG Acquisition. The company plans to list its units, consisting of one Class A ordinary share and one-third of a redeemable warrant, on the New York stock exchange under the symbol VGAC.U.

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