Are media companies cooling on SPACs?

Has the lukewarm reception afforded to BuzzFeed’s public listing meant that media companies are now having second thoughts about using Special-purpose acquisition company (SPAC) mergers as a mechanism for issuing shares?

Axios Media Intelligence thinks they are and is reporting that the next high profile media SPAC merger, Forbes, might not go ahead as planned.

The company which had hoped to close out its SPAC by early 2022 is reportedly the subject of a $620 million bid from investment company GSV. The move has apparently been instigaterd by GSV Asset Management CEO Michael Moe, with participation from “top family offices and institutional investors.”  It would value the media entity at slightly less than the money that Forbes would attract should it complete its planned SPAC merger with Magnum Opus.

SPACs (or special purpose acquisition companies) for those unfamiliar with the term, are publicly traded companies created for the purpose of acquiring or merging with an existing company. They have proved popular with media companies as they are faster and less complex than going public via an IPO. Media companies who have taken this route include Taboola and Group Nine Media.

It could be that Forbes is heading towards a buy out rather than a SPAC listing after watching BuzzFeed, which issued shares via a SPAC, losing 40% of its value over the opening day’s price, 

Forbes insists that it is going ahead with the SPAC and won’t comment on any communication with GSV.

“We are moving full steam ahead with the SPAC transaction,” Forbes Media chief communications officer Bill Hankes told Axios. “We remain on schedule to close the transaction in the first quarter.”

Axios, however claims that “some of the Forbes top brass much preferred some of the private offers it received prior to the SPAC announcement, most notably an earlier effort by GSV.”