Allwyn SPAC merger shelved as macroeconomic conditions worsen
Lottery giant to revisit public listing in the future as $9.3bn deal with Cohn Robbins Holdings Corp. ditched
Allwyn’s proposed listing on the New York Stock Exchange via a reverse merger with SPAC partner Cohn Robbins Holdings Corp. (CRHC) has been called off.
Allwyn was set to list with the blank-cheque firm in a deal valued at $9.3bn, but the pair have come to a mutual decision to shelve the proposal due to the darkening macroeconomic environment.
Allwyn said it had received strong indications of support from potential investors, but the “significant market volatility” and “concerns about the prospects for inflation, interest rates and recession” means the deal will not proceed.
Allwyn, which operators lotteries in the Czech Republic, Greece, Austria, Italy and Cyprus, said it remains committed to joining the public markets in due course when the macroeconomic conditions are more favourable.
The news comes despite CRHC praising Allwyn after the lottery giant’s route to become the operator of the fourth National Lottery licence in the UK was cleared, while hinting it is set to target the “$100bn US market”.
Additionally, in August, PPF Group agreed to purchase 26 million Allwyn shares at $10 each as part of a backstop commitment.
This backstop will result in a $260m financial commitment from PPF Group, which also holds around four million shares in CRHC, to support the newly formed company.
Allwyn CEO Robert Chvátal noted the group was still a “highly cash-generative business” despite the news and thanked CRHC for its support.
He said: “Allwyn was encouraged by the feedback from many leading investors, demonstrating the attractiveness of our business to the investment community.
“However, due to the prolonged and increasing market volatility, we and Cohn Robbins have decided not to proceed with the proposed business combination.
“We are grateful to the firm’s founders, Gary Cohn and Cliff Robbins, for their support over the past year and hope to work with them again in the future.”
The CRHC board of directors will now consider the firm’s next steps, including a potential alternative business combination.
Cohn Robbins was established by Cohn, a former economic adviser to Donald Trump, and investor Robbins. They raised $828m from investors in September 2020.
On axing plans to merge with Allwyn, the pair said that since January “we have witnessed a pronounced negative turn in market psychology, and just a week ago, the market suffered its worst day since June 2020”.
They added: “The persistently volatile and negative market conditions have led to our mutual decision with Allwyn not to proceed in completing the transaction.”