Two SPACs backed by billionaire Ken Moelis are withdrawing US IPO plans

Chief Executive Officer of Moelis & Co., Ken Moelis (C) smiles after ringing the company’s IPO bell on the floor of the New York Stock Exchange shortly after the opening bell in New York April 16, 2014. REUTERS/Lucas Jackson

March 16, 2022

(Reuters) – Two special purpose acquisition companies (SPACs) backed by billionaire investment banker Ken Moelis have withdrawn their plans for IPOs in the United States, regulatory filings showed on Wednesday.

The SPACs, ACI Corp III and Atlas Crest Investment Corp IV, filed for their IPOs in March last year, looking to raise up to $1 billion combined.

Moelis was among a string of high-profile investment bankers and investors, including Bill Foley and Chamath Palihapitiya, who rushed to take advantage of the lucrative dealmaking frenzy with SPACs.

However, interest in the market has waned as shares of several companies, including Grab Holdings and BuzzFeed Inc, which merged with SPACs, tumbled after going public.

High redemption rates by SPAC investors have also dampened investor appetite, as has volatility in US markets, fueled by rate hike concerns and geopolitical tensions.

A SPAC backed by Moelis, founder and chief executive officer of investment bank Moelis & Co, previously took electric aircraft startup Archer Aviation Inc. public. But even with that deal, the companies had to change terms to take $1 billion off Archer’s enterprise value.

SPACs are publicly traded companies without operations but with a pool of capital raised through an IPO which they use to merge with private companies in deals that take the private companies public.

(Reporting by Niket Nishant in Bengaluru; Editing by David Gregorio)