With Forbes SPAC Deal on the Brink, A New Deal Emerges

Image Credit: iStock Images, dusanpetkovic

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

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.

Forbes-ing Ahead

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.