Executives behind Digital World Acquisition, the SPAC that plans to take Donald Trump’s media business public, have failed to pay their proxy solicitors, Reuters reports. The Financial Times first reported the news on Saturday.
Digital World, set up by Patrick Orlando, has not paid Saratoga Proxy Consulting for its work helping to rally shareholders, the report said, citing people familiar with the matter.
The SPAC adjourned shareholder meetings four times earlier this month when it became apparent there were not enough votes to pass a proposal for a deadline extension until September 2023 for closing the deal with Trump’s company. Digital World needs 65% of shares outstanding to support the measure.
The SPAC triggered an automatic three-month extension in exchange for its sponsor adding $2.875 million (10 cents a share) to the trust account, then continued rallying shareholders to vote on the proposal for a year-long extension. The effort has evidently been challenging. Orlando has said in interviews that a majority of Digital World’s shareholders are retail investors whose participation in proxy votes is typically less than robust.
Of equally pressing concern to the SPAC is the fate of a $1 billion PIPE investment. The subscription agreement on the PIPE, which is far and away the largest pot of money involved in the Trump deal, is set to expire tomorrow. PIPE investors might then walk away. Read more.
