Business

Chamath Palihapitiya Spac deal launched amid Uyghur controversy

Spac backed by tech investor Chamath Palihapitiya has agreed to merge with a kidney disease-focused healthcare company, the latest move by the trader that sparked controversy this week by saying that ” nobody cares” about the Uyghurs in China.

Palihapitiya has been a prolific sponsor of special purpose acquisitions, launching 10 blank test vehicles to capitalize on booming demand. The latest deal between his Social Capital Suvretta III Spac and ProKidney, a therapy company focused on treating chronic kidney disease, values ​​the combined company at $2.64 billion.

It is expected to offer $825 million in proceeds, including $250 million from Palihapitiya’s Spac, which is listed on the Nasdaq stock exchange in June 2021.

The deal features $575 million in private investment in public equity financing (PIPE), $125 million of which is from Palihapitiya’s venture capital firm Social Capital. Palihapitiya said chronic kidney disease has affected his late father, and the merger will provide ProKidney with funding to continue a phase 3 trial in the cell therapy treatment.

The deal comes a day after Palihapitiya said on his podcast that “nobody cares what’s happening to the Uyghurs” in China. “Every time I say I care about Uyghurs, I am actually lying,” he said.

Many companies and investors are facing new pressure ahead of the Beijing Winter Olympics after the US and UK announced their boycott of the event in the face of outcry by human rights groups and others over China’s persecution of Muslim Uighurs in Xinjiang. The U.S. Department of State has accuse China about “genocide and crimes against humanity” in the treatment of the Uyghurs.

Beijing has denied the accusations of abuse and encourage boycott against foreign companies such as apparel retailer H&M that have spoken out against the use of forced labor in the region.

Palihapitiya, who owns a stake in the National Basketball Association’s Golden State Warriors team, later said that human rights mattered. “I realized I lacked empathy,” he said, after the Warriors said Palihapitiya did not represent their point of view.

A Warriors spokesperson said in a statement: “As a limited investor with no day-to-day functionality with Warriors, Mr Palihapitiya does not represent our franchise, and the views of he certainly does not reflect the views of our organization. ”

Palihapitiya’s comments drew backlash from some Republicans, who said they exposed his hypocritical behavior, as well as those of the NBA.

Marsha Blackburn, a Republican senator from Tennessee, described his remarks as “sickening” and “proof that the NBA will support Communist China at all costs”.

Mitt Romney of Utah said that “the arrogant denial of the genocide of China’s Uyghurs and other ethnic minorities by the billionaire venture capitalist who founded a fund ironically named ‘Social Capital'” is abominable, immoral and abominable”.

Tom Cotton, a Republican senator from Arkansas, said the NBA “will prove itself greedy, spineless and hypocritical if it doesn’t force Palihapitiya to sell its interest to the Warriors.”

Palihapitiya, along with co-sponsor Kishen Mehta, will make $62.5 million from the so-called Spac promotion, according to Spac Research data. Spac sponsors are paid in the form of founder stock, known as a promotion, which typically includes taking 20% ​​of Spac’s equity at a nominal price of $25,000. When the Spac merger is complete, the sponsor’s heavily discounted stock will convert.

The deal marks the fifth merger for Palihapitiya’s Spacs, with others including Richard Branson’s space tourism company Virgin Galactic and wellness company Clover Health.

Investor enthusiasm for Spaces has cooled from last year’s frenzied highs as regulatory scrutiny mounts. Investors have withdrawn their cash at a higher rate, and Spac withdrawals have increased in recent months as some funders struggle to find the right target company to go public.

Additional reporting by Sara Germano in New York

Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button
Immediate Peak