A blank cheque company headed by former Barclays boss, Bob Diamond, has called off its planned merger with crypto firm Circle.
Circle and Concord Acquisition Corp — the special purpose acquisition firm where Diamond is chair — announced the “mutual termination” of their tie-up on 5 December.
Concord has just five days to find another potential combination with its Spac, it added.
Circle expanded in February and sought a valuation then of up to $9bn. The initial deal was announced on 14 July last year, with plans to combine Concord with Circle on the New York Stock Exchange.
The deal gave Circle an enterprise value of $4.5bn, and was struck at a time when the crypto sector was flying high, and big names such as Coinbase and Bakkt also listed in New York. The sector is now in the midst of a crisis as coin values have tumbled and the collapse of big names such as FTX have undermined credibility.
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“Circle plays a key role in the blockchain’s disruption of financial services,” said Diamond said in a statement. “I remain confident in Circle’s regulatory-first approach to building trust and transparency in the financial industry, which has never been more important, and I will continue being an advocate for the company as it continues to grow.”
“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” added Jeremy Allaire, co-founder and CEO of Circle.
Spacs boomed in the first six months of 2021, hitting a record value of $127bn, as celebrities including golfer Tiger Woods, former US president Donald Trump and basketball star Shaquille O’Neal all unveiled blank cheque vehicles. Financiers including the Zaoui brothers, former Credit Suisse CEO Tidjane Thiam and Diamond also launched their own Spacs last year. However, activity has since slumped and Spac experts predict that at least 30% of Spac IPOs launched last year could fail to find a target.
Spacs raise money through an IPO to fund an acquisition of a private company in order to take it public, within two years. The money is held in a trust, and shareholders in the Spac have the right to sell their shares back to the blank cheque company once an acquisition target is found.
To contact the author of this story with feedback or news, email Paul Clarke