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• Forbes terminated $630 million merger deal with Magnum Opus
• SeatGeek called off $1.35 billion SPAC deal with RedBall
Business magazine publisher Forbes and online ticketing company SeatGeek on Wednesday said the companies would terminate mergers with blank-check firms to list themselves amid the greater regulatory scrutiny around the SPAC deals.
Forbes Global Media Holdings Inc entered into a $630 million deal last year with Magnum Opus Acquisition Ltd (NYSE: OPA), a special purpose acquisition company (SPAC) led by Jonathan Lin, a former executive at billionaire Steven Cohen’s Point72.
The purpose of the merger was to build consumer-focused products and cut its reliance on media revenue.
Mike Federle, Forbes CEO, in a press release, said, “Our digital transformation has delivered double-digit revenue and EBITDA growth over the past year, which not only significantly outperformed the financial targets provided at the start of the SPAC transaction last year but continues to deliver high-quality cashflows and compelling year-over-year and sequential growth since then.”
SeatGeek said it had called off its $1.35 billion SPAC deal with RedBall Acquisition Corp (NYSE: RBAC) due to “volatility in the public markets”.
SPACs are shell companies that raise funds through a public listing to acquire a private company and take it public, sidestepping the stiffer regulatory scrutiny of a traditional initial public offering (IPO).
Blank-check deals are attracting scrutiny from the US Security and Exchange Commission (SEC), which has already proposed new rules and additional disclosures from the deal sponsors in March.
US Senator Elizabeth Warren on Tuesday said she is planning to introduce “SPAC Accountability Act of 2022”, a bill that will codify the SEC’s proposals into law to crack down on SPACs, curbing the “proliferation of low-quality deals and poor due diligence, often resulting in huge losses for retail investors.”
Picture Credit: Forbes
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