The blank-check firm struggling to take Donald Trump’s social media company public rallied in premarket trading after the two companies reached an agreement that pushes back one impediment to the deal reaching completion. Others still loom.
(Bloomberg) — The blank-check firm struggling to take Donald Trump’s social media company public rallied in premarket trading after the two companies reached an agreement that pushes back one impediment to the deal reaching completion. Others still loom.
The SPAC, Digital World Acquisition Corp., and Trump Media & Technology Group said they extended the deadline for their dual commitment to the merger — known as the outside date — until Dec. 31, according to a filing Wednesday.
That could give the parties almost four extra months to solidify the pact after Trump Media had previously signaled it didn’t believe it was bound to keep negotiating beyond a Sept. 8 deadline, according to filings.
That date still looms large for DWAC. While the special-purpose acquisition company got Trump Media to agree to keep working toward a deal, it needs shareholder approval to extend the time it has to complete a merger — called the liquidation deadline — past Sept. 8.
DWAC shareholders are scheduled to vote on Aug. 17 on whether to give the company another year to close a deal.
If the vote fails, and a deal remains elusive, that would force DWAC to return the cash it raised from investors. The SPAC has already extended its deadline four prior times.
DWAC shares jumped as much as 8.7% in premarket trading on Thursday.
“TMTG remains committed to the merger with DWAC, which we believe will help maximize TMTG’s potential,” Trump Media chief executive Devin Nunes said in the statement.
The SPAC also disclosed in the lengthy filing that it plans to issue a new share class that would confer special voting rights to Trump Media’s current owner, essentially ensuring majority ownership of the post-deal company.
The SPAC also disclosed in the filing that it has engaged Adeptus Partners LLC as its auditor after Marcum LLP — which has been riddled with regulatory problems of its own — abruptly resigned last week. In order to complete the deal, which has been plagued since its inception nearly two years ago, the SPAC needed an auditor.
Nasdaq Inc. had warned DWAC that its shares faced delisting for non-compliance with regulatory disclosures. The latest filing said Nasdaq had granted DWAC an extension to file quarterly and annual results.
–With assistance from Subrat Patnaik.
(Updates stock moves throughout.)
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