Shareholders of «Freedom Acquisition I» approved the merger with Complete Solaria. This means the blank check company of the former Credit Suisse CEO has come further than many others. Still, it's hardly a home run.
While a class action lawsuit by AT1 bondholders seeks to bring former Credit Suisse executives, including Tidjane Thiam, to a New York court, the former Credit Suisse CEO is running unchecked to Wall Street's finish line.
Thiam's publicly traded blank check company Freedom Acquisition I said Wednesday that shareholders approved the merger with Complete Solaria at an extraordinary general meeting on July 11. Meanwhile, rows of Spacs (special purpose acquisition companies) have been stranded on base or dissolved in the US financial mecca this year.
High Redemptions
Investors representing 76.9 percent of issued and outstanding shares approved the announced merger, with Freedom shareholders also waving home all other proposals presented. Complete Solaria was born in 2022 from the merger of two California residential solar companies, making it a vertically integrated developer in the field - from module technology to installation to customer financing.
Freedom, like nearly all Spacs now, is struggling with high redemptions. According to its 8-K report filed with the SEC, as of May 31, the record date for the extraordinary shareholder meeting, 19,868,496 shares of Freedom common stock were outstanding, of which 11,243,496 shares were Class A common stock. As of July 7, the record date for the filing of redemption requests, holders of 10,908,004 shares of Class A common stock had validly elected to redeem their shares of Class A common stock, records show.
Valuation Halved
It became apparent in mid-June that Freedom was also having a rough run in light of the difficult market environment for Spacs. At the time, it was revealed that Complete Solaria's valuation had been cut in half, while the company had received an additional $10 million in bridge financing. These changes dropped Complete Solaria's valuation from $450 million to $225 million. Freedom was responding to declining share prices of Complete Solaria's publicly traded peer group.
In general, investors have pulled out of the Spac sector in droves following the boom years of 2020 and 2021. Investors, regulators, and courts have increasingly scrutinized and scrutinized Spac and De-Spac transactions. The volume of Spac IPOs and mergers has now fallen to pre-hype levels.
Many Deals Fall Through
Funding from public and private investors has plummeted, while redemptions by existing investors have increased substantially.
Even among the Spacs that were able to identify potential takeover targets, investors were already voting with their feet, in some cases rejecting proposed mergers and taking their cash instead. This year, even vehicles owned by prominent investors such as Todd Boehly, co-owner of London's Chelsea soccer club, fell by the wayside.
