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June 21 (Reuters) – Blockchain-based payments company Roxe Holdings Inc is set to strike a deal to go public through a merger with blank check company Goldenstone Acquisition Ltd (GDST.O ) for a combined valuation of $3.65 billion, according to people familiar with the matter.
The deal comes against an unfavorable market environment with cryptocurrencies plunging in value and investors largely losing interest in special purpose acquisition companies (SPACs) of this type, in part to due to disappointing returns.
None of Roxe’s investors plan to sell their shares, the sources said. Goldenstone raised just $57.5 million in its IPO in March this year, a tiny fraction of the deal’s value.
Roxe investors are also entitled to a premium for additional shares in the combined company if certain share price targets are met, the sources said.
A deal could be announced later on Tuesday, the sources said, requesting anonymity ahead of a formal announcement.
Founded in 2019, Roxe connects banks, payment companies, and money transfer companies, facilitating cross-border payments using their private blockchain tokens. It does not use cryptocurrencies, the market value of which has been volatile.
Bitcoin fell below $20,000 on June 18 for the first time since December 2020. It has fallen around 60% this year. The overall crypto market crashed to around $900 billion from a record high of $3 trillion in November. L1N2Y503U
This would be Roxe founder Haohan Xu’s second SPAC merger this year after agreeing to take crypto exchange Apifiny public earlier this year in a $530 million deal.
According to Dealogic data, about 600 SPACs that have been made public over the past two years are still trying to close deals. Just over six months into 2022, 26 SPAC mergers have been terminated in the United States, according to data from industry tracker Spac Research. That compares to a total of 18 for all of 2021 and 7 in 2020.
Reporting by Echo Wang in New York; Editing by Howard Goller
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