BuzzFeed is preparing a takeover bid for shares amid protests from workers.
Shareholders of BuzzFeed, the digital media pioneer known for its lists, quizzes and a news division that won its first Pulitzer Prize this year, voted on Thursday to take the company public.
The deal that will bring BuzzFeed to the stock market has raised less money than initially expected, which could dampen the company’s spending in the years to come and cause it to curb its ambitions.
The long-running plan, led by BuzzFeed co-founder and CEO Jonah Peretti, will merge it with a special purpose acquisition company, 890 5th Avenue Partners. SPACs collect funds through an initial public offering and use this money to buy a private business.
The deal is expected to close by Friday, 890 5th Avenue Partners said in a press release. BuzzFeed will debut on the stock exchange on Monday, under the ticker symbol BZFD. Part of the deal includes the finalization of BuzzFeed’s $ 300 million acquisition of Complex Networks, a sports and entertainment publisher.
Since investors who buy into a SPAC don’t know which company it plans to buy, they have the option of buying back those shares at their IPO price – in this case $ 10 – before it closes. a deal. Many did. BuzzFeed could have raised over $ 250 million from PSPC investors, but in the end, it only got $ 16 million, according to a statement from BuzzFeed and 890. But BuzzFeed will have $ 150 million by selling a debt obligation. Other PSPC deals in recent weeks have suffered from repayment demands from shareholders.
As shareholders voted, a move that could mean millions of dollars to its early investors and some current and former staff, not everyone at the company cheered: union employees in its division of l information, BuzzFeed News, organized a day of work stoppage in an attempt to speed up contract negotiations. All 61 workers who belong to the BuzzFeed News Union, which includes journalists, editors and designers, attended, the union said.
In a statement, the union accused the company of refusing to budge in contract negotiations. The main sticking point is compensation. The union said BuzzFeed is offering a guaranteed 1% annual wage increase and a minimum wage of $ 50,000.
“We deserve a strong contract that protects us and ensures a fair and equitable workplace for everyone in our unit,” Katie Notopoulos, senior technical reporter, said in the statement.
A BuzzFeed spokesperson said the company would return to the bargaining table “next Tuesday where we hope the union will provide a response on these issues.”
The union, which was formed in February 2019, is represented by the NewsGuild, which also represents workers at the New York Times and other media. The union and the company have yet to agree on a first contract.
BuzzFeed started in a small office in New York’s Chinatown in 2006 as an experimental viral media project for Mr. Peretti, when his day job was chief technology officer for the Huffington Post. He devoted himself full-time to BuzzFeed in 2011, after AOL bought HuffPost for $ 315 million and turned it into a stand-alone media company with the help of $ 35 million from investors.
It was quickly hailed as the future of news media. In recent years, however, he has missed his income targets and some investors have pushed for a sale. Last year, BuzzFeed gained momentum by buying HuffPost from its last owner, Verizon, in a stock purchase transaction.