Mallard Acquisition Corp. (MACU) Chooses Liquidation over Extension

Mallard (NASDAQ:MACU) announced this morning that it plans to begin liquidating its trust on April 29, after facing high redemptions connected with its April 25 vote to extend its transaction deadline to October 29.

At the vote, 77.67% of shareholders opted to redeem, which would have reduced Mallard’s trust from $110 million to about $23.7 million. The latest round of announced SPAC deals has been for smaller and smaller targets, but even at that, this would have left it with little to work with, particularly in a tough PIPE market.

Now all shareholders of record will receive the estimated $10.10 pro rata share of the trust over the 10 days following April 29. Mallard becomes the third SPAC to liquidate in 2022 following Burgundy Technology in March and both CHP and Alberton last week.

Both Mallard and Burgundy IPO’d at about the same time in October 2020 and August 2020, respectively, and neither entered into a definitive agreement during their search window. Unlike Burgundy, however, Mallard did not have the ability to extend its deadline automatically with a contribution to its trust, but rather had to request an extension by shareholder vote, which may have made this tougher for investors to swallow.

CHP and Alberton each announced deals, and CHP opted to liquidate after mutually agreeing to terminate its transaction with Accelus. Alberton, meanwhile, was forced to liquidate after an exceptionally long 15-month SEC review of its combination with SolarMax.

As such, 2022 is on pace to have the most SPAC liquidations of the past 12 years, surpassing 2019, which saw five. But as with number of deals that have been terminated recently, the actual rate of terminations and liquidations has been steadily falling. Heading into 2019, the SPAC market had seen 80 SPAC IPOs in the previous two years. Heading into 2022, we’d seen 861 over the previous 24 months, or a ten-fold difference.

A certain amount of churn is healthy for the market and it would take an extreme uptick in the pace of liquidations to match the proportion of SPACs that liquidated in the years before the 2020 SPAC boom.