October 1, 2022

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Forbes, the wealth-obsessed business publication, has decided to call off a deal to go public through a special-purpose acquisition company, also known as a SPAC, amid cooling investor appetite for the once-popular financial instrument, two people with knowledge of the plans said.

The cancellation could be announced as early as this week, one of the people said.

The deal, announced in August, would have taken the company public at a $630 million valuation through a merger with Magnum Opus Acquisition, a SPAC based in Hong Kong. In February, Forbes said it had agreed to a $200 million investment from Binance, a cryptocurrency exchange, as part of the deal.

SPACs, also known as blank-check firms, are publicly traded shell companies that raise money with the express purpose of taking a private firm public. Investor enthusiasm around blank-check companies peaked early last year but deflated after a number of SPACs failed to live up to their promises to investors.

Regulators — including the chair of the Securities and Exchange Commission, Gary Gensler — have heightened the scrutiny of SPACs, and shares of many companies that went public through blank-check firms have plummeted.

Forbes was one of several media companies that had hoped to tap the SPAC market to help fuel growth. But not all went ahead with deals, and some that did have struggled.

Axios earlier reported that the prospects for Forbes’s SPAC deal looked bleak.

Shares in BuzzFeed, which went public through a SPAC deal in December, have tumbled more than 50 percent. Vice’s efforts to go public through a SPAC stumbled as investors turned on the market, and the media company instead looked to raise more money from private investors. There is also hand-wringing in the media industry over the state of the advertising market, especially after Snap, the…

The New York Times

2022-06-01 10:39:12

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