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Plans to take the Forbes media kingdom public through an SPAC merger could be falling through, and the publication's Chinese ownership is looking for a way out.
Axios reported Tuesday that American investment firm GSV is lining up to buy the 104-year-old, storied financial publication just two weeks after 15-year-old media disruptor Buzzfeed's SPAC deal tanked. A pact with Chinese blank-check company Magnum Opus Acquisition is now in doubt.
Founded in 1917, Forbes Media was family run until 2014, when 95% of the company was sold for $475 million to Integrated Whale Media, a Chinese investment group headed by under-the-radar Hong Kong financier Yam Tak Cheung. But things quickly got testy after the sale when Integrated missed an interest payment and defaulted on a loan the Forbes family fronted to help finance the deal. That led to a lawsuit between the two, which was settled in 2017.
With investors recently souring on SPAC mergers, Cheung has been looking for another way out, and may have a private buyer in GSV Asset Management CEO Michael Moe, who isn't afraid to pony-up cash for the so-called "Capitalist Tool":
- The GSV deal would value Forbes at $620 million — with payments beginning on December 31 followed by a second in March 2022.
- That would be about $10 million less than the SPAC merger with Magnum, but would remove the risk posed by post-deal redemptions by investors that could take a huge chunk out of the $400 payout Cheung hopes to get.
Past is Prologue: A private deal for Forbes now seems like a safer move. After Buzzfeed went public through a SPAC merger earlier this month, 94% of investors redeemed their stock, and shares quickly fell nearly 40% from its opening price.
Second Time's A Charm: Before the SPAC merger was on the table, GSV kicked the tires of Forbes, looking to purchase it for about $650 million back in May. A $30 million saving in three months proves, as ever, that patience is a virtue if you have a desperate seller.