Customers of pharmaceuticals company Gelesis take its pills to lose weight, the Financial Times reports. But executives at the group had another concern when Gelesis was merging with Capstar Special Purpose Acquisition: losing investors.
Before the merger closed earlier this year, the deal team sweetened the terms to entice investors not to flee. Yet 99 per cent of investors pulled their money anyway, enabling Gelesis to raise only $105 million instead of a planned $376 million. The Boston-based drugmaker later fired 140 marketing staff.
The generous investor provisions for the Gelesis merger are another sign of how the once-hot market for special purpose acquisition companies has fizzled. Power has swung from executives offering deals to the investors needed to back them. Even then, some investors balk.
SPAC investor redemptions hit 81% in March, according to Dealogic. Read more.
