SPACs are turning to costly new tactics to keep investors from jumping ship as market confidence wanes in the once red-hot alternative to IPOs, Reuters reports.
Blank-check acquisition firms and the companies they acquire are having to hand over bigger stakes in the ventures to investors in some cases, often at big discounts. Deal managers are also seeking backstop financing from investment firms and plowing in more of their own cash.
Less than three months into 2022, 13 mergers involving special purpose acquisition companies have already fallen through in the United States, according to data from industry tracker SPAC Research. That compares with a total of 18 in the whole of 2021.
In money terms, almost $9.5 billion worth of mergers have been canned this year, according to Dealogic data. Read more.
