Fresh off of a yearslong battle to close on his purchase of the Minnesota Timberwolves, Alex Rodriguez’s business empire has another legal fight over seller’s remorse on its hands.
Lynk Global, a satellite phone service provider that agreed to merge with A-Rod’s Slam Corp., is purposefully torpedoing the $800 million merger that seeks to bring Lynk public, according to a complaint filed by Slam in Delaware last month and recently made public.
“This is a case about seller’s remorse,” lawyers for Slam wrote in a June 19 complaint filed with the Delaware Court of Chancery. “Following months of self-created delay and a leadership change, Lynk now appears set on walking away from the transaction and repudiating its obligations. Lynk’s goal is apparently to run out the clock.”
Lynk disagrees: In a June press release on the Slam filing, the company said, “Lynk believes SLAM’s claims are baseless [and] will vigorously defend against them and intends to file counterclaims.”
Still, from A-Rod’s perspective, this is the second case of a major purchase being hit with a seller who seems to have changed their mind. A-Rod and partner Marc Lore, who is also involved in the Slam SPAC, fought in court for years to get Glen Taylor to follow through on a 2021 agreement to sell the NBA’s Timberwolves. That deal was finally settled in A-Rod’s favor in June—just as the situation with Lynk ended up in court.
Lynk is a satellite-based phone network startup that says it can bring mobile phone coverage to some 750 million people on the planet without access to traditional cellular phone services. In late 2023 it agreed to merge with Slam at an $800 million valuation, which would provide $200 million in much-needed funding to get the satellites into space.
The transaction would be much like any other special purpose acquisition company transaction: Slam Corp. and Lynk would merge, making Lynk a publicly traded company on the Nasdaq. A SPAC is a so-called blank check company that goes public in its own IPO with the specific purpose of finding another business to combine with and take public.
Slam raised $575 million in its IPO during the peak of SPAC popularity intending to find a sports, media or health-related business to take public. But Slam ended up facing difficulties in the market after the SPAC bubble burst in 2022. The SPAC said it evaluated hundreds of potential deals and, in at least in one case, found the sports association, which was a benefit during the SPAC craze, had become a hurdle. In a separate Delaware SPAC lawsuit not involving Slam, it was disclosed a SPAC-focused hedge fund named Zama considered Slam as a vehicle to take a Philippines casino venture public. Discussions, that lawsuit states, dropped off when it was determined Slam’s value-add was to bring celebrities to the casino.
In light of such issues, securing a merger agreement with Lynk in late 2023 meant Slam would end up being a rare athlete-led SPAC success story. A-Rod was justifiably proud.
“We’d rather not do a SPAC and take something public unless we felt really passionate about it, we’re long-term thinkers, and our core values are aligned,” Rodriguez said during a Bloomberg Television interview in December 2023. “I mean, it’s such an exciting space. To think that this is a trillion-dollar business opportunity to connect the unconnected.”
But according to Slam’s court filing, shortly after A-Rod’s public celebration of the deal, things began to go awry. In early 2024, Lynk was unable to meet its obligations to provide financial statements required by the Securities & Exchange Commission, eventually leading to the first of three extensions on the merger deadline, costing Slam $80,000 a month to placate its shareholders. What at first seemed to be unintentional delays by Lynk on the paperwork then turned to intentional foot dragging after a new Lynk CEO was named in November, according to the court document.
Slam’s evidence is redacted by the court in the public version of the filing, but it’s clear the company thinks it has Lynk dead-to-rights, since after five paragraphs of blacked-out text Slam states: “All of this revealed Lynk’s strategy and overriding commercial objective: slow walk providing financial information to Slam for month after month, run out the clock on the [business combination agreement], and then pursue an alternative transaction.” That’s followed, tantalizingly, by three more words before continued redactions: “Indeed, Lynk admitted–“
An email to A-Rod business partner and Slam president Kelly Laferriere was directed to an outside PR firm, which declined comment. An email seeking comment sent to Lynk’s Amy Mehlman, its head of global affairs, went unanswered.
According to the Slam complaint, Lynk has had a change of heart after realizing its business is now more valuable than the $800 million valuation the Slam merger placed on it and prefers an undisclosed deal or deals with others. Lynk recently raised $85 million in Series B funding from Intelsat and SES, two satellite communications firms.
Slam asks the court to compel Lynk to follow through with the merger and to award the SPAC damages to be determined by a trial. While waiting for the court’s decision, Slam shareholders have voted to extend the window for closing the merger once more.
With reporting assistance from Michael McCann.