It’s official: following reports yeterday that a deal was in doubt, Forbes announced today that its shareholders have terminated a $630 million merger agreement with Magnum Opus Acquisition, the media outlet announced in a press release. The news comes amid a downturn in sentiment for blank-check deals as regulatory scrutiny of SPACs tightens.
“The Forbes brand is a sought-after and trusted brand with more than 100 years of equity that is synonymous with success and validation,” said CEO Mike Federle. “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.”
Forbes is mostly owned by Integrated Whale Media (IWM), a Hong Kong-based investment firm that bought a 95% stake in the company from the Forbes family in 2014.
Magnum Opus, also based in Hong Kong, filed two deadline extensions on the deal this year.
In December, investment firm GSV was reportedly working on a bid to buy Forbes Media at a $620 million valuation as an alternative to Forbes’ SPAC merger.
In related news, a group of Republican US Sentators recently forwarded correspondence to Treasury Secretary Janet Yellen, noting they have concerns regarding the proposed acquisition of Forbes under an entity with Chinese Communist Party ties, as reported by Financial Regulation News.
U.S. Sens. Bill Hagerty (R-TN), Tom Cotton (R-AR), Bill Cassidy (R-LA), and Ted Cruz (R-TX) penned the letter, saying Magnum Opus is a SPAC controlled by the Chinese Communist Party.
“China’s deliberately vague patchwork of intelligence, national security, and cybersecurity laws compel companies to support and cooperate with the government’s intelligence work,” they wrote. “Not only is Magnum Opus domiciled within the jurisdiction of the Chinese Communist Party (CCP), but the seed money for Magnum Opus came directly from China’s sovereign wealth fund, the Chinese Investment Corporation (CIC).” Read more.
