Ares Acquisition Corporation (AAC) Terminates X-energy Deal, Will Liquidate
by Nicholas Alan Clayton on 2023-10-31 at 8:48am

Ares Acquisition Corporation (NYSE:AAC) has mutually terminated its combination with nuclear energy firm X-energy and will liquidate on or about November 7.

The news marks an unfortunate end for deal that the two sides put significant work into since announcing it in December 2022. The transaction included an $80 million PIPE that was increased in conjunction with two valuation changes to X-energy, gradually working it down from $2.1 billion to $1.05 billion.

Ares shareholders were set to vote on approving the deal at a special meeting at 4 pm ET today, and the early peek at redemption numbers may have catalyzed the termination.

Both sides blamed market conditions for the change in plans and neither will require the other to pay a termination fee. In fact, X-energy and the SPAC’s backer Ares Management (NYSE:ARES) have agreed to continue to work together on a private basis, and Ares has agreed to still invest in the company as it remains outside of the public markets.

That could still leave the door open to a further SPAC transaction down the road for X-energy that would be better timed to the market climate. The sponsor still has another SPAC searching, Ares II (NYSE:AACT), which has until April 2025 to do a deal.

It is the end of the road for Ares I, however. It has already canceled its extension vote and instead expects to return cash to shareholders in its liquidation at a rate of $10.79 per share.

The parties initially announced the deal in December 2022. Rockville, Maryland-based X-energy has developed small modular nuclear reactor technology designed to provide nuclear plants for projects ranging from individual industrial sites to regional utilities.

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