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Liberty Media Acquisition Company (LMAC), a SPAC (particular function acquisition firm) launched by media large Liberty Media two years in the past, is about to unwind by the top of the yr following a shareholder vote approving the transfer on Monday (November 14).
The choice comes as LMAC nonetheless has but to merge with a possible goal because it went public on the Nasdaq Inventory Trade in January 2021. The corporate raised $575 million on the time.
Information of the shareholder vote’s final result was first reported by The Hollywood Reporter.
LMAC was established “to seek for a goal within the media, digital media, music, leisure, communications, telecommunications and know-how industries.”
Because the IPO, LMAC has “evaluated greater than 140 such goal companies,” the corporate mentioned in its proposal to wind down the enterprise issued to shareholders in October.
“In evaluating potential goal companies, our administration crew remained centered on discovering honest valuations amid unstable market circumstances,” LMAC mentioned.
It added: “Our administration crew has noticed what it believes had been excessive valuations in 2021, a declining IPO market in 2022, and important private and non-private market volatility, which have prevented us from securing a possibility that we imagine will provide a compelling return on funding for our stockholder.”
The board additionally cited “latest modifications in US tax regulation” amongst different causes for the proposal. The modifications are “anticipated to create company degree tax liabilities in reference to stockholder redemptions” from January 1, 2023.
SPACs have been prompted to shutter following the passage of US President Joe Biden’s Inflation Discount Act, which imposes a 1% excise tax on inventory ‘buybacks’ after December 31, 2022.
Because of these elements, LMAC’s board determined to stop all of its operations and redeem all excellent public shares by December 30, LMAC mentioned.
“We now have decided that it’s not possible for the corporate to finish an preliminary enterprise mixture” by the unique termination date on January 26, 2023.
As of Monday, LMAC was buying and selling at $10.02 and its market cap stood at $720.2 million.
Later this month, shareholders of one other media-focused SPAC, The Music Acquisition Company (TMAC), are set to vote on a proposal to liquidate sooner than deliberate because it has didn’t merge with a possible goal firm over a yr because it went public.
TMAC was based by long-time Geffen Data President Neil Jacobson. It debuted on the New York Inventory Trade in February final yr, elevating $230 million within the course of.
It comes because the SPAC growth appeared to have died down following the US Securities and Trade Fee’s proposed new guidelines to impose extra disclosure necessities on IPOs by SPACs.
SPAC Analysis notes that just about 50 SPACs within the US have liquidated as of Monday (November 14), with one other 40 deliberate for the rest of the yr. Liquidations in 2022 have price SPAC sponsors greater than $700 million.
The analysis agency additionally famous that just about $6 billion value of threat capital that has been deployed because the begin of 2021 is sitting in limbo.
“SPAC sponsors have at all times been the one get together with significant threat of their funding going to zero. And it appears to be like like lots of the members of the most important ever class of SPACs will find yourself strolling away with nothing,” SPAC Analysis mentioned.
LMAC’s sponsor is Liberty Media Corp., which held a 20% stake within the blank-check agency.
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