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Some investors backing out of SPAC merging with Trump’s media firm

THE REALITY social networking logo sometimes appears on a smartphone before a display of former U.S. President Donald Trump in this picture illustration taken February 21, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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Sept 23 (Reuters) – Some investors are backing out of Digital World Acquisition Corp’s (DWAC.O) intend to acquire former U.S. President Donald Trump’s social media marketing firm Truth Social, the blank-check firm said on Friday.

Digital World said it had received termination notices from private investment in public areas equity (PIPE) investors ending nearly $139 million in investments from the $1 billion commitment it had previously announced.

Investors, who signed the PIPE commitment about twelve months ago, are absolve to move their money following the Sept. 20, 2022 deadline if the offer have not completed.

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Digital World didn’t disclose the investors that pulled out. Sources told Reuters Sabby Management, which had committed $100 million to the PIPE, is among the investors who’ve terminated.

Sabby Management declined to comment.

More investors could grab within the next couple of weeks, sources said, because they can terminate anytime following the deadline. Most are looking forward to DWAC to propose more preferred terms to PIPE investors, sources added.

The offer between your special purpose acquisition company (SPAC) and Trump Media and Technology Group (TMTG), which owns Truth Social, has been on ice because of civil and criminal probes in to the circumstances round the agreement.

TMTG didn’t immediately react to a obtain comment.

The SPAC have been hoping the U.S. Securities and Exchange Commission, that is reviewing Digital World’s disclosures on the offer, could have given its blessing right now.

Digital World said this month it could extend the deal’s life by 90 days following its bid for a 12-month extension from its shareholders fell short.

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Reporting by Akash Sriram and Nivedita Balu in Bengaluru, Svea Herbst-Bayliss and Krystal Hu in NY; Editing by Maju Samuel and Josie Kao

Our Standards: The Thomson Reuters Trust Principles.

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