Cantor, Adam Back’s BSTR Seek New Terms for Bitcoin SPAC Merger

A Cantor Fitzgerald-backed blank-check company and Adam Back’s Bitcoin investment company scrapped the original terms of their planned merger and will negotiate a revised deal, as a tougher market for crypto challenges Bitcoin treasury companies. Cantor Equity Partners I Inc. and BSTR Holdings said Wednesday they will not proceed under the merger agreement signed last year and will instead pursue amended terms that better reflect current market conditions. They did not disclose the financial terms of a revised transaction or say when a new agreement could be reached.

The merger is designed to take BSTR public through Cantor’s special purpose acquisition company. Back, the chief executive of Blockstream and one of Bitcoin’s earliest developers, planned to use BSTR to raise capital to buy and hold Bitcoin, joining a wave of listed companies built around accumulating the cryptocurrency.

The deal had come under pressure as Bitcoin prices and shares of crypto treasury companies have slumped, making investors more reluctant to back new offerings. Bloomberg News previously reported that Cantor had allowed some investors in the deal’s private financing to reduce their commitments ahead of a planned shareholder vote after the transaction struggled to secure funding. Earlier: Cantor Bitcoin SPAC Lets Investors Pledge Less as Crypto Slides.

Cantor Fitzgerald, which is lead adviser on the deal, last week sought to shore up support by offering some large investors to commit less money than they’d originally pledged. Architects of the planned tie-up initially sought to raise as much as $1.5 billion in financing from what are called private investment in public equity, or PIPE, investors.

As part of Wednesday’s announcement, the companies scrapped the private financing tied to the original merger, indefinitely postponed a shareholder meeting that had been scheduled for July 10 and canceled pending redemption requests from SPAC investors, returning those shares to shareholders. They said any revised transaction would be detailed in future regulatory filings if an agreement is reached.