(Bloomberg) -- Wall Street maven Michael Klein’s SPAC empire was dealt another blow when a deal to take CorpAcq Holdings Ltd. public was called off.
The banker’s Churchill Capital Corp. VII on Sunday said it will shut down after the deal was terminated, citing conditions about the market for initial public offerings. The liquidation will mark the third special-purpose acquisition company backed by Klein to throw in the towel.
It’s another sign that the once-frenzied financing mechanism is struggling to retain investor enthusiasm, with more than 30 terminated deals this year and roughly 370 liquidations since the end of 2021, data from SPAC Research show. Klein-led SPACs have completed five deals while a nearly $290 million blank check firm is on the hunt for a target, the firm’s data show.
Churchill Capital VII investors will receive $10.84 per share, according to the filing, a roughly 8.5% premium to where shares closed in their final session on Friday. The warrants, which closed at 25 cents on Friday, will expire worthless.
Companies that have gone public through Klein-backed SPACs show a rough track record, with none of them trading above the $10 mark which blank checks typically go public at. Oklo Inc., an advanced nuclear systems developer backed by Sam Altman, has been the best performer in this category despite dropping below $8 per share, while Lucid Group Inc. has failed to come anywhere near its peak. Multiplan Corp. and Skillsoft Corp. each went public through deals with Churchill SPACs and trade for pennies relative to their debut prices.
The SPAC market once captured the attention of celebrities, former athletes and Wall Street titans who raced to join the flurry. The market was thrust into turmoil in 2022 due in part to an oversupply of sponsors and deals that brought startups public despite choppy fundamentals.
During the boom in 2020 and 2021, banks lined up to raise billions for blank check firms before holding so-called “SPAC-offs” when they’d bring in sponsors to essentially bid on the targets. In 2021 alone, Klein’s former employer Citigroup Inc. worked on more than 100 SPACs that raised some $22 billion, equating to almost one SPAC every other business day, data from SPAC Research show.
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