Four Palihapitiya-backed SPACs look to raise $800 million through IPOs

(Reuters) -Four blank-check companies, backed by venture investor Chamath Palihapitiya, are looking to raise a total of $800 million through initial public offerings with a focus on acquiring biotechnology firms, regulatory filings showed on Wednesday.

The new companies, Social Capital Suvretta Holdings Corp I, II, III and VI, said they will not offer warrants in the IPO, long seen as a key incentive for investors to lock up their money in special purpose acquisition companies (SPACs).

SPACs typically offer shares with warrants, which entitle them to buy more shares at a certain price, making the offer an attractive feature if the underlying stock price goes up.

A blank-check company, also known as SPAC, uses capital raised through an IPO to buy a private company, usually within two years. The deal then takes the private company public.

Chamath Palihapitiya has been a prolific backer of blank check firms, merging them with a range of companies, from space tourism firm Virgin Galactic Holdings Inc to home-selling platform Opendoor Technologies Inc.

“We believe we can support biotechnology companies in developing a long-term financing strategy and raising capital beyond a short-term window, which the traditional IPO route does not address,” said Palihapitiya, who expects a “significant” number of private biotech firms to go public in the near term.

The new SPACs have a one-year lock-up on founder shares, only exception being if the shares trade above $12 for 20-30 trading days, but no earlier than 150 days following the close of a deal, the filings showed.

The companies, which have Morgan Stanley as the sole book-runner on their offerings, will list on the Nasdaq under the symbols ‘DNAA’, ‘DNAB’, ‘DNAC’ and ‘DNAD’, respectively.

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