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AQR Capital’s new position in Levy Acquisition Corp.

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Levy Acquisition Corp.

AQR Capital Management added a position in Levy Acquisition Corp. (LEVYU). A 13G filing in December 2014 noted that the fund owns 2,250,000 shares and that the fund owns a passive stake of 12% in the company.

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Company overview

Levy Acquisition Corp. is a blank check company incorporated on August 2, 2013, as a Delaware corporation. Larry Levi, the founder of Levy Restaurants, formed the company. A blank check company is created to initiate a merger, asset acquisition, stock purchase, or reorganization. It can also be formed to effect a capital stock exchange or a combination with one or more entities. Blank check companies are also known as special purpose acquisition companies (or SPAC).

$150 million IPO

Levy Acquisition Corp. completed its initial public offering (or IPO) on November 19, 2013. The company sold 15 million shares for $10.00 per unit. Each unit consists of one share of its common stock and one-half of one warrant. Each warrant entitles the holder to purchase one share of the company’s common stock for $11.50 per share.

The company generated net proceeds of $150 million. The net proceeds, which are deposited in a trust account, will be used to fund the business combination.

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Restaurant and hospitality sector

Levy Acquisition Corp. intends to pursue an acquisition opportunity in any business industry or sector. However, its primary focus is on the restaurant and hospitality sectors, as its management team has contacts and sources in these sectors. These existing relationships should allow the company to generate attractive acquisition opportunities.

For the quarter ending September 30, 2014, Levy Acquisition Corp. reported a net loss of $256,626. The company had cash of $519,825. It held $150,045,323 in its trust account, which includes $5,250,000 of deferred underwriting discounts and commissions.

Blank check companies

According to US Securities and Exchange Commission (or SEC) regulations, if a blank check company is unable to complete an acquisition within 18 months after the effective date of the company’s registration statement, the funds held in the trust or escrow account would return to the investors.

The latest data from the SPAC Analytics indicated that last year, 12 blank check companies raised $1.75 billion. This was the highest level since 2008.

AQR Capital’s 13G positions

AQR Capital Management initiated positions in Hemisphere Media Group (HMTV), as well as in blank check companies Levy Acquisition Corp. (LEVYU) and Collabrium Japan Acquisition Corp. (JACQU).

AQR Capital reduced its positions in blank check companies Chart Acquisition Corp. (CACGU) and Capitol Acquisition Corp. II (CLACU).

In the next part of this series, we’ll look at AQR Capital’s new position in blank check company Collabrium Japan Acquisition Corp.

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