The Ray Allen of M&A
June 29, 2010
I've got to give Tom Hicks credit. He's the Ray Allen of dealmaking. He'll throw up a few bricks, but he'll keep on shooting until his stroke comes back. Yesterday, he filed an S-1 for a new blank check company seeking to raise $200 million.
The filing comes as some of Hicks' higher profile busts continue to generate headlines. Less than a week ago, a court forced the Texas Rangers into mediation with its lenders to resolve what has been an ugly bankruptcy for Hicks' former team. Meanwhile, even as Hicks tries to unload his stake in UK football club Liverpool, the team's former owner saw fit to write a letter to the editor of the Times, to express regret that he ever sold the club to Hicks and George Gillett.
This could be a case study on why financiers should not get involved in sports ownership.
Still, when it comes to Hicks' lower profile investments, he often manages to show his old touch.
The 2009 acquisition of Resolute Natural Resources by Hicks' first SPAC so far looks like a winner, as the company since the reverse merger has a market cap nearly $100 million above the $582 million deal last September. And analysts are largely bullish. Two weeks ago, BMO Capital Markets initiated coverage on the stock, calling it a good small-cap story, based on its attractive balance sheet, while two others maintain "buy" recommendations on the stock.
Hicks has made comebacks before. He was a poster child in some LBO circles for style drift when Hicks Muse Tate & Furst lost big in Latin America and telecom.
This time, though, he's counting on the SPAC market to reclaim his reputation. And if he manages to emulate the Resolute deal with this new vehicle, investors will likely look past the Rangers and Liverpool.
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