SPAC to return remaining $533 million raised for Trump social … – Reuters
The Truth social network logo is seen on a smartphone in front of a display of former U.S. President Donald Trump in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights
NEW YORK, Oct 12 (Reuters) – Digital World Acquisition Corp (DWAC.O), the SPAC that plans to merge with former U.S. President Donald Trump's media and technology company, said this week it would return to investors $533 million raised for the deal, after some have already backtracked on $467 million of commitments.
The development means the end of the so-called private investment in public equity (PIPE) transaction that would have delivered Trump Media & Technology Group (TMTG), the operator of Trump's Truth Social platform, $1 billion as part of its merger with Digital World.
A SPAC (special purpose acquisition company), or blank-check firm, is a publicly listed shell company that raises funds to merge with a private company.
Digital World raised the $1 billion PIPE last year but failed to complete the merger with TMTG by a September 2022 deadline, as U.S. financial regulators held up the deal over Digital World's disclosures to investors. That gave the PIPE investors the right to cancel their commitments.
TMTG CEO Devin Nunes said in a press release that terminating the PIPE was "in the best interest of TMTG's equity holders and completing our merger with DWAC as soon as possible."
A TMTG spokesperson said in a statement on Thursday that the PIPE's termination was "a key step toward completing our merger." She did not respond to a question on why terminating the PIPE ahead of the merger was positive for TMTG.
An Aug. 9 amendment of TMTG's deal with Digital World called for the unwinding of the PIPE. This amendment gives Trump new shares in Digital World with more voting power.
The unwinding of the PIPE would leave Digital World with the $293 million cash it had raised in its initial public offering in September 2021, which is set to go to TMTG upon the deal's closing. That pot of money could also shrink if investors opt for redemptions.
The TMTG spokesperson did not respond to a question on whether the company plans to raise additional funds. TMTG previously raised $22.8 million in financing from private investors, Reuters reported last October.
Digital World and TMTG have tweaked their merger agreement so that either side can terminate the deal between Oct. 31 and Nov. 21, if their boards no longer believe the merger will benefit shareholders. Trump controls 90% of TMTG, according to a Feb. 2, 2021 services agreement.
Digital World has faced several challenges since its October 2021 deal with TMTG. It has been the target of investigations by the U.S. Department of Justice and the Securities and Exchange Commission, ousted its chief executive, and shook up its board.
In September, Digital World investors voted to give an extension of up to one year to complete the TMTG deal, the deadline for which had been pushed back several times. It remains unclear when and if Digital World will ask its shareholders to vote on the deal with TMTG, a necessary step for its completion.
Shares of Digital World dropped 2% on Thursday to $15.54, far below their peak of around $97 a share in March 2022.
Prima, a private-equity backed farmer that is the largest producer of peaches and other stone fruit in North America, filed for Chapter 11 bankruptcy protection in Delaware on Friday.
Reporting by Helen Coster; Editing by Josie Kao and Rod Nickel
Our Standards: The Thomson Reuters Trust Principles.
Thomson Reuters
Helen Coster is a Media Correspondent at Reuters, where she writes a mix of spot news, enterprise and analysis stories. She was previously a Senior Editor on Reuters' Commentary team, where she assigned, edited and wrote analysis pieces. Prior to joining Reuters, Coster worked as a senior writer at Forbes, where she wrote magazine and web stories and a blog about the intersection of business and social issues. A graduate of Princeton University, she has reported from six countries, including Pakistan, India, and Greece. Contact: 9178417220
Prima, a private-equity backed farmer that is the largest producer of peaches and other stone fruit in North America, filed for Chapter 11 bankruptcy protection in Delaware on Friday.
The backlog of ships is growing at Israeli ports while operations continue at most terminals amid preparations by the military to launch a ground assault in the Hamas-controlled Gaza Strip, according to data and sources.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2023 Reuters. All rights reserved