The long-running negotiations to merge Trump’s media company with a blank check firm faced collapse on Friday if the deadline wasn’t extended.
The long-stalled talks to merge former president Donald Trump’s Truth Social with a blank check firm, was granted a reprieve on Tuesday after shareholders of the special acquisition company voted to extend a negotiation deadline for another year.
Digital World Acquisition Corp. DWAC, +2.02%, which announced plans in 2021 to merge with the Trump Media and Technology Group and take it public, would have been forced to cancel the deal and liquidate on Friday if its shareholders hadn’t agreed to grant an extension. The future of Trump’s media company had been in question if the deal fell apart. Earlier this year, Truth Social laid off staff as the talks stalled. DWAC had been furiously lobbying shareholders to roll back the clock on the deadline. On Tuesday morning, shareholders voted to approve the extension for another 12 months, the Wall Street Journal reported. Representatives for DWAC and Trump’s media group didn’t immediately respond to messages seeking comment. The negotiations to finalize the deal to pump some $300 million of DWAC’s money into Trump’s media company had encountered numerous hurdles over the more than two years since the merger agreement was announced. DWAC has no operations and would have to return the $300 million it raised in an initial public offering to do a deal if it couldn’t close a transaction within two years of its IPO. In July, DWAC agreed to settle fraud charges with the Securities and Exchange Commission alleging it misled investors in the deal. A SPAC is typically created as a shell company to raise money for an acquisition after the venture goes public. In these deals, the company usually decides its merger target after it raises cash from investors and goes public. But the SEC says DWAC executives already had extensive merger talks with Trump and that they failed to disclose that to its investors as it raised money. In August, the two sides put out statements reaffirming their commitment to finalizing the deal. Two weeks ago, DWAC executives urged its shareholders to extend the negotiations deadline, warning that the deal would collapse otherwise. “We believe in the value and prospects we bring to the table and to a true democracy in the United States, and with the continued support of our shareholders, we can navigate this challenge successfully and potentially complete the proposed business combination with Trump Media and Technology Group Corp. which we know so many of our stockholders believe in,” DWAC’s chief executive, Eric Swider, wrote to shareholders in late August.
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