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CAPITAL MARKETS

Trump’s first Spac failed, will his second succeed?

Donald Trump tried to launch a special purpose acquisition company just before the 2008 financial crisis, but hold-ups derailed the deal. A current attempt faces fresh challenges.

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Photo: Reuters

Donald Trump explored the launch of a special purpose acquisition company (Spac) in late 2007, Euromoney has learned.

The deal would have been done via Deutsche Bank, one of the few big Wall Street firms willing to work with Trump at the time, after his repeated business bankruptcies.

Trump wanted to exploit a blank-check vehicle boom in 2007 that would not be matched in annual Spac deal issuance by volume until a renewed mania for launches in 2020.

He hoped to secure a listing of over $1 billion for a vehicle called Trump Acquisition Corporation that would be used to buy an existing business and – in theory at least – to enhance its value by adding the Trump brand.

From the start of discussions, however, it was apparent that completing a deal would be challenging.

Trump brought his son Donald Trump Jr and his daughter Ivanka into meetings and made his lawyer Michael Cohen responsible for handling the details of a potential deal.

One banker involved in the deal recalls having to explain very basic terms such as warrants during these discussions.

Deutsche and Donald Trump’s office declined to comment or did not respond to requests from Euromoney for comment on attempted Spac deals, past and present.

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