Mudrick Acquisition Corp. II (NASDAQ:MUDS) has terminated its combination with collectible card-maker Topps after it announced it would not see a renewal of its foundational contract with Major League Baseball (MLB) for producing its signature cards. Topps had previously held a 70-year hold on the license for cards on individual MLB players that has been in place since 1952.
Mudrick II shareholders were set to vote on the deal on August 25th, with an August 23 redemption deadline, but in light of losing a crucial part of the Topps business, most likely redemptions would have been very heavy. Terminating the deal was the smart move. MUDS still has nearly 13 months left on its clock, an estimated $321 million cash held in trust, and will now be free to chase other opportunities.
Additionally, in the current regulatory environment, perhaps even with a backstop and PIPE covering a potential full redemption of the trust, “getting public” that way no longer passes muster. Regulators have been keeping a close eye on the SPAC asset class and, in the case of Stable Road, willing to levy fines and make examples.