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Liberty Media Unwinds SPAC, Citing No Targets for Takeover

Liberty Media CEO Greg Maffei said his company looked at around 140 companies in all as potential media or entertainment acquisitions, but saw no target worth pursuing.

Liberty Media Acquisition Corp., a special purpose acquisition company (SPAC) launched by John Malone’s Liberty Media a couple of years ago in hopes of finding at least one takeover target, has taken a key step towards closing down the financial vehicle.

On Monday, a virtual special meeting of stockholders voted in favor of the move by approving updates to its certificate of incorporation, which allow it “to unwind and redeem all of its outstanding public shares prior to Dec. 30,” which is “in advance of the contractual termination date of Jan. 26, 2023.”

Liberty Media president and CEO Greg Maffei told the online meeting that his company — which owns the Atlanta Braves and the Formula One race car circuit among other media and entertainment assets — looked at around 140 companies in all as potential acquisitions, without identifying who they were. He added a picky Liberty Media saw no targets worth pursuing for a merger.

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Maffei added Liberty Media had been working amid an industry backdrop where financial markets had turned down. That made financing any potential transaction more difficult and jumping through regulatory hurdles for a time extension to work out taxation issues more challenging.

 “Frankly, getting an extension wasn’t worth it, given we had nothing on the table that was attractive enough for us to take us look,” Maffei told investors about the decision to wind up the SPAC.

SPACs, or “blank check companies,” have been a popular vehicle in recent years, including for former top media executives, including James Murdoch and former Walt Disney executives Tom Staggs and Kevin Mayer, to raise cash and hunt for acquisitions. But stock market volatility, macroeconomic uncertainty and the disappointing performance of some SPACs, along with other factors have led to questions about the outlook for SPACs.

Liberty Media Acquisition (LMAC) had announced the special meeting in October, detailing the challenges of its management team, led by Maffei, in finding a suitable merger deal.

“Since its IPO on Jan. 23, 2021, LMAC’s management team has employed a broad set of search criteria for potential target business combinations and evaluated more than 140 such target companies,” the firm said back then. “In evaluating these businesses, management remained focused on finding fair valuations amid volatile market conditions. LMAC’s management has observed what it believes were high valuations in 2021, a declining IPO market in 2022 and significant public and private market volatility, which have prevented the company from securing an opportunity that it believes will offer a compelling return on investment for its stockholders. In light of these circumstances, LMAC has determined that it is not feasible to complete an initial business combination (or enter into an agreement in principle with respect to an initial business combination) by Jan. 26, 2023.” 

LMAC also noted “recent changes in U.S. tax law” that “could create corporate-level tax liabilities in connection with stockholder redemptions following year-end.”

This article was originally published by The Hollywood Reporter.