Barça Media’s IPO will be an obstacle course. The first hurdle appeared to be next week’s pivotal shareholder meeting of Mountain & Co. I Acquisition Corp, the company with which the Joan Laporta-led club’s content business will merge. However, there were complications beforehand that almost ruined the operation. Barça didn’t receive the 40 million it should have received until August 29, so it sent a letter warning it was under no obligation to proceed with the deals, Mountain told the US Securities and Exchange Commission , SEC) ). After “good faith negotiations,” a new agreement has been reached, but many obstacles remain to be overcome.
Clause 7.3.e of the agreement stipulated that Barça must receive three payments of approximately 20 million each for minority stakes in its content business: two on August 11 and another on August 21, with the deadline at the first contribution was automatically extended until August 29th 10 million. Of these amounts, the company received 20 million only on August 11, the day of the signing of the complex agreements with various groups that would lead to Barça Media being listed on Nasdaq and having its headquarters in the Netherlands.
Faced with the fact that the other 40 million were not received within the agreed deadline, Barça sent a letter to Mountain. In it, he warned that “neither the income condition nor the deadline has been met” and that Barça and its subsidiaries “are not obliged by the Business Combination Agreement to complete the transactions contemplated therein,” as acknowledged by the Cayman Islands-based company. For a moment, Barça’s entire financial engineering operation to generate more revenue and list Barça Media loomed large.
“After negotiations in good faith regarding compliance” with the terms and conditions, Barça and Mountain have renegotiated the agreement, indicates the Nasdaq-listed company, which will serve as host for Barça’s content business. Now the deadline for receiving the outstanding 40 million has been extended to October 10th. However, the path is unclear: “It cannot be guaranteed that the additional third-party funds necessary to meet the revenue condition will be obtained before the deadline,” warns Mountain. “Furthermore, until the income condition is met, FC Barcelona may, at its sole and absolute discretion, terminate the business combination agreement at any time,” he adds.
Next up before that date is Mountain’s shareholder meeting, which EL PAÍS said will take place on September 14 in a small office on the outskirts of Wilmington, Delaware. The first item on the agenda is to extend the deadline for closing the complex operation until March 9, 2024. Mountain’s supporters point out that if their proposals are not approved, the company will be liquidated.
The main shareholder of Mountain & Co I Acquisition (a Spac, a company created expressly for an acquisition) is its founder, German businessman Cornelius Boersch, who controls 17.6% through several companies. But the decision rests in the hands of four hedge funds (three from New York and one from Chicago) that control more than half of the shares: Calamos Investment Trust (11.1%), Highbridge Capital Management (11.5%), Saba Capital Management (14.0%) and Glazer Capital (13.9%). In the event that the extension does not go through, another proposal is on the agenda that would allow a simple majority to decide to postpone the meeting to collect more votes.
Even if the extension is approved, it would still allow shareholders to request redemption of their shares, which would further complicate a process that still needs to be approved by a later meeting of shareholders. The board has pointed out that the promoter has a particular interest in closing a company even if it is not profitable for the remaining shareholders, as it stands to make a lot of money even if the investors lose it.
Mountain & Co Acquisition is currently based in the Cayman Islands. If the investors agree to the transaction, after several stock exchanges (for which Barça provides tax exemptions), Barça Media will be a Netherlands-based and Nasdaq-listed company, but domiciled in Spain for corporate tax purposes. and with a Spanish subsidiary that manages the business.
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