BuzzFeed left with lesser cash in hand as SPAC investors withdraw money

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Dec 2 (Reuters) - BuzzFeed Inc said on Thursday it would receive just about 6%, or $16.2 million, of the proceeds from the trust account of the blank-check firm it is merging with, after shareholders of the acquisition vehicle redeemed a majority of their shares.

The merger with special purpose acquisition company (SPAC) 890 Fifth Avenue Partners (ENFA.O), named after the fictional Avengers mansion, was originally projected to fetch $288 million for the online media outlet from the SPAC's account.

A SPAC typically sells shares at $10 apiece, puts the cash in a trust account, and then searches for a company to buy. Its shareholders can choose to redeem their shares in return for cash.

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The SPAC market has been slowing down this year, with tightening accounting guidance and closer scrutiny from the U.S. Securities and Exchange Commission.

The deal, which gave BuzzFeed a valuation of $1.5 billion in June, was approved by the SPAC's shareholders on Thursday. The company will also get at least $150 million through a convertible note financing.

Shares will start trading on the Nasdaq under the symbol "BZFD" on Dec. 6.

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Reporting by Niket Nishant in Bengaluru; Editing by Amy Caren Daniel

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