Schorsch SPAC fails to get off the ground

The Nicholas Schorsch-backed SPAC — the leisure business-focused G&P Acquisition Corp. — failed to make an acquisition before its Nov. 15 deadline, requiring the company to liquidate and redeem its shares, according to an announcement by the company Tuesday.

The inability of G&P Acquisition, a special purpose acquisition company, to launch comes after the NYSE said earlier this month that it was delisting the company's warrants, which were to be used to acquire shares of Class A common stock in the company, because of extremely low pricing.

The per-share redemption price for the public shares will be approximately $10.17, the company said. The last day that the company’s securities traded on the New York Stock Exchange was Tuesday. At the end of the month, the public shares will be deemed cancelled and will represent only the right to receive the redemption amount.

It's typical for SPACs to redeem shares and return money to shareholders if they don't make an acquisition before a stated deadline once they list. G&P Acquisition began trading in May 2021.

"Current market dynamics, enacted and pending changes in the regulatory environment, and unrealistic pricing expectations persuaded us that the prudent decision was to return to shareholders the capital held in trust, with interest, on our original timeline rather than seek a further extension,” Brendan O’Donnell, CEO of G&P Acquisition, with the ticker GAPA, said in the statement.

O'Donnell did not return a call Thursday morning to comment. Schorsch, the former nontraded real estate investment trust czar, is chairman of the company. From 2010 to 2015, Schorsch was one of the most visible faces in the retail securities industry, with his partnership, American Realty Capital, raising close to $20 billion from retail investors who bought shares of a variety of ARC-branded nontraded REITs and alternative investments.

G&P Acquisition was a family affair for Schorsch. O’Donnell is his son-in-law and his son, Nicholas Schorsch Jr., was president, according to filings with the SEC. 

SPACs are publicly traded shell companies that raise money from investors with the expectation of acquiring specific target businesses. They were investment darlings during the Covid-19 pandemic, but the boom has crashed of late.

SPAC investors have turned leery of taking their companies public right now because they could easily be caught in the downdraft of the current stock market sell-off, pushing share price valuations well below the $10 per share level at which many are priced.