Buzzfeed readies stock offering amid worker protest

Union employees stage day-long work stoppage

Shareholders in Buzzfeed, the digital media pioneer known for its listicles, quizzes and a news division that won its first Pulitzer Prize this year, voted Thursday to take the company public.

The deal that will take Buzzfeed onto the stock market raised less money than initially expected, which could crimp the company’s spending in the years to come and lead it to rein in its ambitions.

The long-in-the-works plan, led by Buzzfeed co-founder and CEO Jonah Peretti, will merge it with a special purpose acquisition company, 890 Fifth Avenue Partners. So-called SPACS raise money through an initial public offering and use that cash to buy a private company.

The deal is expected to close by Friday, 890 Fifth Avenue Partners said in a news release. Buzzfeed will make its stock market debut as soon as Monday, under the ticker symbol BZFD. Part of the deal includes the completion of Buzzfeed’s $300 million acquisition of Complex Networks, a sports and entertainment publisher.

Because investors who buy into a SPAC do not know what company it plans to buy, they have the opportunity to redeem those shares at their IPO price — in this case $10 — before it reaches any deal.

Many did.

Buzzfeed could have raised more than $250 million from the investors in the SPAC, but in the end it got only $16 million, according to a news release from Buzzfeed and 890. But Buzzfeed will have $150 million that it is raising from selling a debt security. Other SPAC deals in recent weeks have suffered from shareholders asking for their money back.

As the shareholders were casting their votes, a move that could mean millions of dollars for its early investors and some current and former staff members, not everyone at the company was cheering: Union employees at its news division, Buzzfeed News, staged a day-long work stoppage to speed contract negotiations.

All 61 of the workers who belong to the Buzzfeed News Union, which includes reporters, editors and designers, took part, the union said.

In a statement, the union accused the company of refusing to budge in contract negotiations. The main sticking point is pay.

A Buzzfeed spokesman said the company would be back at the negotiating table “next Tuesday where we hope the union will present a response on these issues.”