RedBall Acquisition Corp, the special purpose acquisition company (SPAC) that had held talks over acquiring a stake in Liverpool owners Fenway Sports Group, is to dissolve.
The SPAC, led by RedBird Capital Partners founder and managing partner Gerry Cardinale and baseball analytics guru Billy Beane, has announced the redemption of its public shares and subsequent dissolution after being unable to land on a satisfactory target.
RedBall came to market in 2020 and immediately the clock started ticking on investing the initial $575m capital, with the SPAC having two years to land.
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Although it was never publicly disclosed from either side, RedBall had been in talks with Liverpool owners FSG up until early 2021 over the possibility of taking a stake of up to 25 percent in the business, which also includes the Boston Red Sox baseball team and Pittsburgh Penguins.
It was a deal that had the potential to take FSG as a business public and onto the stock market.
RedBall raised $575m in its initial public offering (IPO) in the summer of 2020 and sought to raise another $950m through Redbird Capital Partners and other private outside investment in its second run to try and raise as much almost $1bn.
Talks went on for a number of months before they finally broke off in late January 2021, the stumbling block being over the $7bn valuation of the overall FSG operation among some investors and a growing reluctance from FSG to take the business public.
Two months later, after Cardinale remained at the table to discuss investment, a $750m deal was struck with Cardinale's private equity firm RedBird, which is to take full control of Italian giants AC Milan from September, for 11 per cent of the FSG business.
After Cardinale decided to use RedBird as the vehicle to take forward his business interests with FSG, RedBall moved on to look at other targets and were rumoured to have been looking at other football clubs before entering into talks with the online ticketing platform SeatGeek.
But in early June, shortly before shareholders were due to vote on a merger proposal, the $1.35bn deal with SeatGeek was mutually ended with both sides citing "unfavourable market conditions".
"Given the volatility in the public markets, together, we determined that a termination of the business combination was in the best interest of all parties," said Jack Groetzinger, SeatGeek chief executive at the time.
RedBall were the first sports-specific SPAC to be formed in a decade when it was created, their arrival at the beginning of what was a wave of SPACs being created as investors saw opportunity in the crisis created by the pandemic.
Over 1,000 SPACs came to market following the initial wave in the summer of 2020, more than 150 of them sports specific. As per the rule around SPACS, a time limit had to be set on acquiring investment opportunities, with many choosing two years, as RedBall did. Failure to land in that time sees investors handed back their money.
A statement on the RedBall website read: "RedBall Acquisition Corp today announced that it will redeem all of its outstanding ordinary shares that were included in the units issued in its initial public offering, effective as of the close of business on August 17, 2022, as the Company will not consummate an initial business combination on or prior to August 17, 2022."
Among those on the RedBall board was former Premier League chief executive and executive chairman Richard Scudamore.
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