KKR & Co. Inc., the investment company which controls KKR Acquisition Holdings I Corp. plans to pay back $1.2 billion to shareholders as the third-largest special purpose acquisition company (SPAC) follows others who have folded amid regulatory changes and tougher deal conditions nowadays.
SPACs have run into tighter credit conditions and difficulty in the market for mergers and acquisitions, amid a gulf between prices asked by sellers and prices that buyers are willing to pay.
KKR Acquisition Holdings I
CEO Glenn Murphy said in a filing late Thursday the firm decided to liquidate after considering a variety of deals.
“We did work on over 50 potential merger targets and although we came close on a number of occasions, given market conditions, we made the decision to wind-up our company and return the funds in our trust account to our public stockholders,” Murphy said in a filing on Wednesday.
The New York Stock Exchange said Thursday it would de-list warrants of KKR Acquisition Holdings I
Typically issued as part of SPAC deals, warrants have no value if its parent plans to liquidate. KKR said in a filing that it has no plans to appeal the NYSE’s move.
A KKR spokesperson declined to comment.
KKR & Co.
raised $1.2 billion for KKR Acquisition Holdings I in March, 2021, as the third-largest SPAC ever, tied with Austerlitz Acquisition Corp. II and Churchill Capital Corp. VII
according to data from finance professor Jay Ritter of University of Florida.
Pershing Square Tontine Holdings Ltd., the SPAC from Pershing Square founder and billionaire William Ackman, ranked as the largest at $4 billion, but Ackman opted to liquidate the vehicle over the summer.
Foley Trasimene Acquisition Corp. II raised $1.3 billion in the No. 2 SPAC slot. That SPAC managed to close an acquisition and now trades as Paysafe Ltd.
Cannae Holdings, Inc.
and Trasimene Capital Management, sponsors of Austerlitz Acquisition Corp. II, announced in October they would redeem money they raised from investors.
Like other SPACs — also known as blank check companies — KKR Acquisition Holdings had a two-year window to complete a deal. In its case, KKR Acquisition Holdings had until March to do so. Sometimes shareholders will agree to extend the time for a transaction, however.
Regulators have been taking a closer look at SPACs as well.
The Securities and Exchange Commission is studying a proposal to require enhanced disclosure to prospective investors about potential conflicts of interest between SPAC sponsors and the companies they target, as well as better information about how an investor’s interest in a SPAC can be diluted as it takes a company public.