Exclusive FNG… Following our exclusive report in July that FG Acquisition Corp (TSE:FGAA.U), the special purpose acquisition company (or SPAC) that agreed to merge with Retail FX and CFDs broker ThinkMarkets, had seen a massive takeover event Almost all of FG’s public shareholders chose to redeem their shares for cash rather than proceed with the ThinkMarkets merger, FNG has now learned from regulatory filings made in Canada that FG’s coffers have indeed been nearly emptied since the acquisition.
According to the filings, FG Acquisition’s “Funds Hold in Escrow” decreased from US$118.7 million as of June 30, 2023, to just under US$2.5 million as of September 30, 2023.
ThinkMarkets IPO background
In mid-May 2023, FG Acquisition and ThinkMarkets announced their intention to merge, in a deal that would effectively bring ThinkMarkets to the Toronto Stock Exchange at a valuation of $160 million. The transaction would see FG’s public class A shareholders own 43.3% of the combined company, while ThinkMarkets shareholders would receive 53.4%. The SPAC sponsors behind FG Acquisition, led by financier Larry G. Swets Jr., will receive the remaining 3.3%.
However, in early July 11,398,742 FG Class A shares (out of approximately 11.5 million shares in total) were deposited by FG’s public shareholders back into the company and redeemed by FG at a price of approximately USD $10.21 per share – meaning FG returned about $116.3 million in cash to its shareholders, who chose to get their money back from FG instead of proceeding with the ThinkMarkets transaction, as was their right. The acquisition effectively emptied FG’s coffers, leaving FG as a public shell with virtually no cash. (The remaining $2.5 million basically represents the interest earned on the Funds held in escrow before they are returned to shareholders).
The massive buyout by FG shareholders came after a Exclusive FNG report that ThinkMarkets had accumulated tens of millions of dollars in debt and losses in the previous two years (2021-2022), while its auditors had issued a warning of “continuing concern” for parent company Think Financial Group Holdings Limited in Australia.
ThinkMarkets IPO is moving forward
While FG Acquisition formally withdrew its preliminary prospectus regarding the merger with ThinkMarkets earlier this month, it has still indicated its intention to proceed with the ThinkMarkets deal.
For the transaction to go ahead, FG faces an already stretched deadline of November 30 (that’s next Thursday) to raise at least $10 million in new capital or the merger with ThinkMarkets will be called off. unless the deadline is extended again.
We will continue to follow this story as it unfolds.