News publisher BuzzFeed, which is set to go public next week, has so far raised only $16.2 million via its special-purpose acquisition company, 890 5th Avenue Partners, a tiny portion of the original $288 million.
The SPAC company 890 5th Avenue Partners said its stockholders approved the proposal that will collectively give BuzzFeed $166.2 million through a combination of 890 trust proceeds and fully committed convertible notes.
BuzzFeed had said in June 2021 that its $150 million in convertible-note financing will be led by investors from Redwood Capital Management, including CrossingBridge Advisors, Cohanzick Management to support the deal.
BuzzFeed May Cash In
BuzzFeed will receive gross proceeds of at least $150 million from fully committed convertible notes and $16.2 million held in a cash trust for the IPO, the SPAC said.
The deal that valued BuzzFeed at $1.5 billion is expected to close on Friday, the SPAC said.
"Market dynamics have led to higher redemptions as the SPAC market has developed," said a person familiar with the matter on condition of anonymity.
BuzzFeed is expected to list on the Nasdaq, Monday, under the ticker symbol BZFD.
Shares of the SPAC closed Thursday's session at $9.91 a share and stockholders who elected to redeem will receive approximately $10 a share, the SPAC said.
BuzzFeed will likely also complete the acquisition of Complex Networks on Friday as well, the SPAC said.
BuzzFeed Founder Jonah Peretti had agreed to acquire Complex Networks from Hearst and Verizon Communications (VZ) - Get Verizon Communications Inc. Report for $300 million, structured as $200 million in cash and $100 million in BuzzFeed equity.
A Complicated Deal
The Wall Street Journal first reported that BuzzFeed was having difficulty receiving funding for its market listing.
Buzzfeed had originally touted 890 5th Avenue Partners for committing $288 million in a cash trust to the IPO.
890 5th Avenue Partners is led by Executive Chairman Adam Rothstein and CEO Emiliano Calemzuk.
Rothstein will join BuzzFeed’s board along with Talent Manager, Founder, and Angel Investor Anjula Acharia and former BuzzFeed President Greg Coleman, once the deal has been completed.
Earlier while talking about Complex Networks, BuzzFeed Chief Executive Officer Peretti had said in a statement, "With today’s announcement, we’re taking the next step in BuzzFeed’s evolution, bringing capital and additional experience to our business."
SPACs are formed for the express purpose of finding and merging with an operating partner. The idea is to speed the operating company to the public markets and avoid the extended process of a traditional initial public offering.
BuzzFeed acquired telecom giant Verizon Media's digital media brand HuffPost in a stock deal in November last year.