News broke on Wednesday that Binance, the world’s largest cryptocurrency exchange, had backed out of a deal to take Forbes Media LLC public via a Special Purpose Acquisition Company (SPAC). This comes after months of negotiations regarding the proposed merger that would have taken the media company and lifestyle brand—which turned 110 years old this year—public for the first time.
The planned transaction had immediately generated excitement across various investing circles. It seemed fitting for Forbes to expand its operations beyond traditional media and potentially capitalize on digital trends in new ways. Even in its 110th year, it was clear that Forbes was still strongly committed to innovation in financial journalism.
Binance, the world’s largest cryptocurrency exchange and one of Forbes’ most valued investments, had agreed to support the merger by purchasing $100 million worth of shares in public offering if successful. Binance first invested in Forbes in 2020 which has since proved quite profitable as Forbes successfully realigned its operations around digital trends and technology advancements. Although Binance ultimately decided not to pursue this additional investment opportunity for unspecified reasons, it is clear that both parties remain active participants within their respective markets through various other investments and partnerships.
Binance-Supported Deal for Forbes to Go Public Via SPAC Is Called Off
Binance, the world’s second-largest cryptocurrency exchange, had previously announced plans to support a deal that would have taken the iconic media outlet Forbes public through a special-purpose acquisition company (SPAC). However, just yesterday, the deal was called off and Binance has backed out of their support. This unexpected decision has left many people scratching their heads and wondering what the backstory was behind this failed deal.
Let’s take a look at the background of the proposed Forbes-SPAC deal.
Binance’s Plans to Take Forbes Public
In February 2021, Binance Holdings Limited, a digital assets company based in Malta, had planned to take Forbes Media LLC public via a Special Purpose Acquisition Company (SPAC). The innovative transaction represented a potential first deal that would have allowed the traditional media outfit to become a publicly-traded company on the NASDAQ Global Market.
InterPrivate Acquisition Corp. created the SPAC, and Forbes wanted to use the vehicle for an estimated $560 million public offering of ordinary shares. However, the deal has been called off due to internal dissention at Forbes over whether or not this move was in the best interests of shareholders. In particular, Steve and Chris Forbes reportedly opposed going public via a SPAC because they felt it would give short-term investors too much control over long-term decisions made by management.
Binance is disappointed that this deal collapsed and said that their plans for taking Forbes Media public “would have increased the value of each share significantly” for all stakeholders involved. However, despite the terminated plans, Binance and InterPrivate are still considering other opportunities to bring established companies into digital businesses based on blockchain technology.
Why the Deal Was Called Off
On April 21, 2021, a deal that initially saw Binance and two other investors supporting Forbes Media’s plans to go public via a special purpose acquisition company (SPAC) was called off. This aborted move would have made Forbes 88-year-old business one of the oldest consumer media companies to enter the public markets in the age of digital media.
The primary reason why the deal was called off is unclear at this time, however there are several potential reasons why the parties involved decided not to pursue the transaction. First, the uncertain macroeconomic climate in many parts of the world has made some investors more cautious about taking new risks. Additionally, after undergoing significant restructuring and other associated costs related to its upcoming IPO, Forbes Media may not have been seen as sufficiently attractive by Binance or other potential partners.
Finally, it is possible that Binance backed out due to their internal risks and concerns regarding making such a high profile move at this current time; leading them to reassess and decide against moving forward with what would have been an important milestone for both themselves and Forbes Media alike.
Impact on Binance
The recent news that Binance-supported deal for Forbes to go public via SPAC has been called off has raised questions about the impact on Binance. While the cancellation of the deal may financially impact Binance and its stakeholders, it also has potential implications for the company’s reputation.
This article will discuss the impact of this deal closure on Binance, its shareholders and its brand.
The proposed takeover of Forbes Media through a special purpose acquisition company (SPAC) was recently called off by Binance, the world’s largest cryptocurrency exchange. This decision has larger implications on the financial state of both Binance and Forbes.
From a financial perspective, Binance’s involvement in the deal was estimated to be around $100 – 400 million dollars, however this money has now been pulled back and allowed Binance to move it into other areas as they deem fit. Along with this, Forbes is now left without an estimated injection of funds that could have drastically changed the outlook of their organization.
It is difficult to gauge whether or not this decision will have an overall positive or negative outcome for either party involved – given that Forbes’ financial outlook would have been significantly altered had the deal gone through, any further speculation as to their immediate future is still unclear. That being said, from a practical standpoint, Binance’s turned-down offer could benefit them in terms of savings against sunk costs and investing elsewhere as they expand operations worldwide.
Impact on Binance’s Reputation
Although the news of a potential Binance-supported deal for Forbes to go public via a special purpose acquisition company (SPAC) has been called off, it will likely have impacted Binance’s reputation.
Binance’s involvement in Forbe’s potential IPO had generated excitement among cryptocurrency investors who saw the development as part of their effort to promote mainstream adoption of digital assets. However, the decision to back out of the deal may indicate some lingering issues between them and Forbes that are yet unknown. Furthermore, this situation could raise concerns over Binance’s services’ reliability.
Given these facts, it can be said that while initially this news created positive vibes in the cryptocurrency industry, it could now lead to apprehension over Binance’s activity in such deals and its commitment towards aiming at mainstream crypto adoption.
Impact on Forbes
The Binance-supported deal to take Forbes public via a special purpose acquisition company (SPAC) was called off on March 23, 2021. This is a major development and has had a major impact on Forbes.
What could have been a major win for the company, regarding financial resources and increased access to capital, has suddenly disappeared. Let’s look at how this could affect Forbes in the long run.
The announcement that Binance-backed special purpose acquisition company (SPAC) GCT Acquisition Corp. and Forbes Media LLC had called off the merger plans that would have taken the iconic media brand public provides insight into the implications of these kinds of deals on financial markets.
At the time of the announcement, GCT Acquisition Corp.’s shares were trading at approximately $9.90 per share, down from its highest recorded value earlier in 2021 at over $17.50. This represents a 44% decline in investment since initial reports broke of GCT’s acquisition efforts with Forbes, thus signaling a sharp decrease in market confidence for SPACs and their involvement in such transactions.
Furthermore, from Forbes’ side, this rescinded transaction has undermined their ability to enter similar merger opportunities for future public traderships. Prospective SPACs will likely be weary of associating themselves with a partner who has failed to meet investor expectations based on prior commitments. This could delay Forbes’ ability to take the business public through similar SPAC-supported routes going forward and have potential financial implications for the media company’s ability to generate sufficient capital growth through outside investments and partnerships.
Impact on Forbes’ Reputation
The announcement that Binance had backed out of a deal for Forbes to go public via a special purpose acquisition company (SPAC) has resulted in some negative attention for the magazine. This setback has raised questions about the financial stability of Forbes and its ability to remain competitive in the rapidly changing media landscape. These concerns may impact Forbes’ reputation and credibility with advertisers, investors, and readers.
Forbes is one of America’s most well-known business magazines and its brand is highly valued. The Binance-supported deal was seen by many as an opportunity for Forbes to unlock additional value and propel it into a larger public market. Unfortunately, the deal will not be realized, which may cast doubts on Forbes’ long-term stability, which could lead advertisers and potential partners to look elsewhere for recognition.
On the other hand, it is also possible that this incident will have no lasting effect on Forbes’ reputation if both parties can move past it quickly without further conflict or controversy. Though there are always risks associated with going public through a SPAC transaction, many such transactions have been completed recently without significant disruption or harm to participating companies’ reputations.. With careful handling of the situation from both sides, Forbes should be able to avoid any long-term damage to its reputation from this setback.
After weeks of intense negotiations, Binance has announced its decision to withdraw from the deal to take Forbes public via a special-purpose acquisition company (SPAC) merger. Negotiations with other parties are ongoing, but the outlook appears uncertain that a new deal will be agreed upon to meet the present deadlines.
In light of this conclusion, Binance has pointed to potential disagreements related to its focus on growth as key factors in its withdrawal. Specifically, it cited Forbes’ target timelines and recognition of existing resources among the core considerations. Nevertheless, it still values Forbes’ status as an iconic media platform and is open to a future partnership.
Ultimately, this outcome is another reminder of Binance’s commitment to stringent corporate governance standards that put business integrity first. The firm hopes the details revealed during negotiations will lead to a more transparent investment environment for controlling security token holders and their underlying assets.
tags = Binance, Forbes, SPAC, invested $200, Forbes Global Media Holdings, Web 3 and blockchain technologies, forbes q1 binance forbessoncnbc, CoinDesk