Mideast SPAC Trickle May Turn to Flood as Dubai’s Shuaa Capital Plans 3 Launches

(Bloomberg) -- Dubai financial services firm Shuaa Capital PSC is considering setting up three blank-check companies of around $200 million each, according to people familiar with the matter, rapidly opening up the booming market for special purpose acquisition vehicles to Gulf investors.

Shuaa, which manages close to $14 billion in assets, approached investment banks to explore setting up the SPACs to pursue deals in the energy, finance and technology sectors, the people said, declining to be named because the information isn't public.

The SPACs are expected to list in the U.S. this year and will target companies in the Middle East and North Africa, the people said. Shuaa's spokesman declined to comment.

Investor enthusiasm for SPACs is finally catching on in the Middle East at a time when the momentum for the vehicles has waned in the U.S. after the lackluster share performance of recent deals and greater regulatory scrutiny.

Read more: Why the Hot SPAC Market Has Started to Cool Down

Blank-check companies are corporate shells that raise money from investors with the aim of merging with private businesses to take them public. They've exploded in popularity last year as an easier and less-scrutinized way to go public compared with an initial public offering. Singapore could see its first SPAC listing this year.

Regional Rarity

The Middle East has so far seen only a handful of SPACs. Abu Dhabi-based music firm Anghami is listing on the Nasdaq stock exchange in New York by merging with a blank-check company, a deal that included a commitment from Shuaa and the parent of the SPAC sponsor in so-called PIPE -- private investment in public equity -- financing.

Dubai-based FIM Partners, the frontier and emerging markets asset manager backed by EFG Hermes, last week raised $200 million in an IPO of a SPAC on Nasdaq. Abu Dhabi sovereign wealth fund Mubadala Investment Co. is meanwhile close to launching two SPACs with a focus on technology and health care, the Financial Times reported last week.

Shuaa, which traces its roots to the late 1970s, is an asset management and investment banking firm led by Group Chief Executive Jassim Alseddiqi. Two years ago, it combined with Abu Dhabi Financial Group through a reverse merger.

©2021 Bloomberg L.P.