Sam Zell's SPAC Throws In The Towel, Will Return Cash To Investors

Equity Distribution Acquisition Corp., a special-purpose acquisition company formed by real estate billionaire Sam Zell two years ago, and chaired by him since then, will cease business. The SPAC will redeem all its outstanding Class-A shares next month and dissolve.

"The company did not find an opportunity...that aligned with its business goals," the blank-check company said in a statement.

Typically SPACs have two years to find a private company to take public.

At the time of its formation in the summer of 2020, the company said in a Securities and Exchange Commission filing that it planned to target North American businesses in the industrial real estate sector. More specifically, the SPAC targeted companies specializing in industrial and industrial distribution tech.

Warrants tied to the company were down 74% to less than 1 cent as of Thursday, and the derivatives will expire worthless, Bloomberg reports. The company's stock closed at $9.97 on Tuesday. Net of taxes, the company says it expects the per-share redemption price for the public shares will be about $10.01.

That means that investors in the SPAC will get their money back, but have no appreciable return to show for their two-year investment.

Other investors in SPACs haven't done that well. Billions were invested by SPACs between mid-2020 and mid-2021, many of them targeting proptech or otherwise real estate-adjacent companies, with mixed results.

Some real estate entities acquired by SPACs, such as Latch and WeWork, are now valued well below the $10 per share that investors paid to be part of the action. Latch traded at about $1.22 per share on Thursday, while WeWork was trading at about $5.64.

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