Gesher Acquisition Corp. II Splits Units: A Strategic Move for SPAC Investors

Gesher Acquisition Corp. II, a Cayman Islands-based SPAC focused on Israeli-based companies with international operations, has taken a pivotal step by announcing the separation of its Class A ordinary shares and warrants into standalone securities, effective May 12, 2025. This move, which will see the units (GSHRU) split into shares (GSHR) and warrants (GSHRW), marks a critical phase in the SPAC’s lifecycle and offers investors new flexibility.

The Split: What It Means for Trading and Liquidity

The separation of securities allows investors to trade shares and warrants independently, enhancing liquidity and enabling more granular investment strategies. Previously, holders of GSHRU units were tied to the performance of both the shares and warrants as a combined package. Now, investors can choose to hold only the shares (GSHR), which reflect the SPAC’s equity value, or the warrants (GSHRW), which grant the right to buy shares at a predetermined price.

The warrants, exercisable at $11.50 per share, become actionable 30 days after the SPAC completes its initial business combination (IBC). This creates a layered opportunity: warrants may appreciate if the post-IBC share price exceeds $11.50, while the shares themselves will reflect the success of the target acquisition.

Key Details of the SPAC’s Structure and Timeline

Gesher’s IPO, completed on March 24, 2025, raised $143.75 million through the sale of 14.375 million units at $10 each. The funds are held in a trust account, available to finance an IBC or returned to investors if no deal is struck by the deadline.

The SPAC has 24 months from the IPO closing to complete an IBC—meaning it must act by March 24, 2027, or face liquidation. Should the deadline pass without a deal, the trust account’s proceeds (minus fees and taxes) will be distributed to shareholders.

Strategic Focus: Israeli Innovation and Global Reach

Gesher’s management team, led by CEO Ezra Gardner and CFO Sagi Dagan, has prioritized Israeli-based companies with operations in Asia, Europe, or North America. This focus aligns with Israel’s reputation as a hub for tech and innovation, offering potential targets in sectors like cybersecurity, fintech, or advanced manufacturing.

The SPAC’s sponsor—Gesher Acquisition Sponsor II LLC—holds significant influence, with anti-dilution rights ensuring its 27.72% stake in the post-IBC entity remains intact even after equity issuances. This structure, however, raises questions about potential dilution for public shareholders if new shares are issued during the IBC.

Risks and Considerations

1. Time Pressure: The 24-month deadline creates urgency. With less than two years remaining, investors must assess whether the SPAC can identify and execute a compelling deal.
2. Target Selection: Success hinges on finding an Israeli company with scalable global operations. Competition among SPACs for high-quality targets may complicate this process.
3. Warrant Valuation: The $11.50 exercise price is a critical threshold. If the post-IBC share price falls below this level, warrants could lose value.
4. Regulatory Uncertainty: While not directly tied to its SPAC activities, the revocation of Gesher’s municipal advisor registration in 2025 underscores the importance of compliance in a regulatory-sensitive sector.

Conclusion: Weighing the Opportunity

Gesher Acquisition Corp. II’s split of its securities offers investors nuanced exposure to its future IBC. With $143.75 million in trust assets and a focused mandate on Israeli innovation, the SPAC has the capital and strategy to pursue attractive deals. However, the clock is ticking: failure to complete an IBC by March 2027 will trigger liquidation, returning approximately $10 per unit (assuming no interest accrual) to shareholders.

Investors should consider the risk-reward balance. The warrants provide upside potential if the IBC succeeds, but they also amplify downside risk if the SPAC fails to meet its deadline. For those willing to bet on Gesher’s team and Israel’s tech ecosystem, the split creates an entry point into a dynamic play. Yet, with only 22 months remaining until the deadline, the stakes are high.

As the separation of GSHR and GSHRW begins, investors must monitor not only the SPAC’s progress but also the broader market’s appetite for SPACs—a category that has seen mixed performance in recent years. The next 22 months will determine whether Gesher’s strategy pays off, or if its capital returns to investors as a cautious exit.