By Matt Egan, CNN Business
Digital World Acquisition Corp., the blank-check firm seeking to merge with former President Donald Trump’s media venture, announced Friday it will avoid an imminent liquidation.
Digital World failed to receive shareholder approval by Thursday’s deadline to extend its merger agreement.
However, the shell company said in a Friday filing it has been able to buy additional time because its sponsor, ARC Global Investments II, deposited nearly $3 million into the company’s trust account to exercise an option to unilaterally extend the merger agreement by three months.
If this hadn’t happened, the entire deal could have unraveled, forcing Digital World to return the roughly $300 million it has raised. That money is intended to fund the merger with Truth Social owner Trump Media & Technology Group. A liquidation would have also threatened the additional $1 billion the Trump media company has raised.
Digital World is still urging shareholders to back a proposal to extend its merger agreement by a year. A special shareholder meeting has been adjourned until October 10.
The controversial merger has been stalled by legal scrutiny. Both the Justice Department and Securities and Exchange Commission are investigating.
Digital World has said those probes have blocked the ability to get the deal consummated, and Patrick Orlando, the CEO of Digital World, had been pleading with shareholders to grant the merger extension. But Trump posted a message on Truth Social last weekend suggesting he’s not concerned about the fate of the transaction.
“SEC trying to hurt company doing financing (SPAC),” Trump wrote. “I don’t need financing, ‘I’m really rich!’ Private company anyone???”
Truth Social, the Twitter-like social network at the heart of the Trump media venture, remains unavailable on Google’s Android app because of deficiencies in the app’s content moderation systems, a Google spokesperson told CNN last week.
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