Silver Lake Invests in Loeb Vehicle to Back Global Blue Deal

(Bloomberg) -- Silver Lake has built up a 12% holding in Far Point Acquisition Corp., the blank-check company backed by Daniel Loeb’s Third Point, to help push through a merger with its portfolio company Global Blue, a filing showed Wednesday.

Silver Lake is the controlling shareholder of Global Blue, which provides tax-refund services to tourists and agreed in January to merge with Far Point. It’s one of the many deals in danger of falling apart following a pandemic that has hurt the global economy.

Silver Lake said in the filing, which confirmed an earlier Bloomberg News report, that it acquired the stock with the intention of voting its shares in favor of the deal. The private equity firm will now have a greater say in the upcoming vote which requires 50.1% of shareholder approval, but there’s no guarantee it will go in its favor. A previous filing showed that 25% of parties had already agreed to vote for the deal. The vote date has not been set.

Far Point, which has a market valuation of about $800 million, said in a statement Wednesday that its board and management are working with outside legal advisers to review Silver Lake’s proposal and have requested additional information from the private equity firm.

Silver Lake also said it would add to the value of the deal to shareholders by converting a $168 million cash dividend to boost the company’s liquidity and hold discussions to try boost the value of the stock warrants in the deal. It said it would match any shares that Far Point’s founders wants to put into the deal and collaborate with Far Point to reduce fees and expenses for shareholders.

Far Point management said in early May that the impact of Covid-19 on Global Blue meant the transaction was no longer in shareholders’ best interests and urged them to vote against it. Global Blue responded by saying Far Point’s investors would benefit by letting the merger go ahead.

Global Blue, a Swiss company, owns kiosks at airports and stores like London’s Harrods that let shoppers claim sales-tax refunds when they fly home.

The global travel industry has been badly hit by the spread of the coronavirus, as countries have brought in lockdowns and restricted the movement of people across borders. Airlines, hotels and cruise lines have all struggled with liquidity. Latam Airlines Group SA is among the latest to fall, filing for bankruptcy in New York.

Silver Lake noted in the filing Wednesday that if the deal doesn’t go through, the special-purpose acquisition company is likely to liquidate on September 14. Global Blue has argued that Far Point investors would get likely get as much or more cash than they would in a liquidation by letting the deal close and then redeeming their shares.

Management at Far Point, whose chairman is former NYSE President Tom Farley, have argued that the pandemic will have a significant negative impact on Global Blue and said it may lack capital to fund operations and satisfy financial obligations.

Ant Financial, the financial services affiliate of Chinese tech tycoon Jack Ma’s Alibaba Group Holding Ltd., agreed in January to invest $350 million in Global Blue as part of the deal with Far Point.

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