Hambro SPAC ditches merger talks with biotech firm

Hambro Perks Acquisition Company (HPAC), a pioneering special purpose acquisition company (SPAC), has abandoned plans for a merger with biotech firm Istesso.

HPAC, which became the first SPAC to float in London in November 2021 after regulators overhauled UK rules, had been in talks with Istesso over a planned merger.

Istesso is part-owned by London-listed IP Group and is involved in a field called immunometabolism, which it says has the potential to “revolutionise the treatment of autoimmunity”. Sky News reported yesterday that HPAC had set its sight on a merger with the firm.

However both companies said the talks have since been ditched.

“HPAC confirms that discussions with Istesso and its major shareholder have been terminated,” Hambro Perks said. “An announcement regarding any potential extension of the deadline to implement a business combination will be made in due course.”

IP Group said it was “aware” of the discussions but they had now been dropped by the firms.

Hambro’s SPAC floated with plans to merge with a fast-growing private European tech firm within 15 months, targeting a £2bn deal.

However, abandonment of the talks puts it among scores of the firms globally which have failed to find acquisition targets after a frenzy of listings of 2021.

SPACs scooped up record amounts of acquisitions in every quarter in 2021, according to data from CBInsights, with big name firms like Wework and Sofi swerving IPOs to opt for SPAC mergers.

Policymakers in the UK feared being left behind by Wall Street in the SPAC boom, and ushered in changes to the rules in 2021 to encourage more of the vehicles to float in London.

However, SPAC IPOs has since plummeted as regulators ramped up scrutiny and shut down some of the fanciful forecasting techniques used by the firms. 

Just 78 SPACs floated in the first three quarters of 2022, compared to 444 in the same period a year earlier, according to S&P Global Market Intelligence data.