The investors made the change because of feedback from the U.S. Securities and Exchange Commission (SEC) that it was reluctant to approve the plan as long as it did not have a new chair, according to a person familiar with the matter. Gary Gensler, President Joe Biden’s pick as SEC chair, has yet to be confirmed by U.S. lawmakers.
The contemplated structure would have made the SPAC more akin to a private equity fund, allowing it to invest in more than one company in separate transactions.
The investors initially submitted the proposal in October and made the filing public in December.
Sloan and Baker’s special purpose acquisition company (SPAC), Soaring Eagle Acquisition Corp, declined to comment, while the SEC did not immediately respond to a request for comment.
A SPAC is a shell company that raises funds in an IPO with the aim of acquiring a private company, which then becomes public as result of the merger. For the company being acquired, the merger is an alternative way to go public over a traditional IPO.
The structure proposed by Baker and Sloan in earlier regulatory filings for their SPAC, previously known as Spinning Eagle Acquisition Corp, would have allowed them to carve out a portion of the capital they raised into a new shell company that would merge with a privately held company. They could then use the remaining cash in the SPAC to repeat the process with other companies.
The pair are still seeking to raise $1.5 billion in the IPO, which would be on Nasdaq.
Baker previously helped lead the SPAC merger with sports betting platform DraftKings Inc. Baker and Sloan also worked together on the SPAC merger with mobile gaming firm Skillz Inc. Reporting by Joshua Franklin in Miami; Editing by Lincoln Feast.