ISS Recommends Investors Reject CoreWeave Deal for Core Scientific

Reuters
Yesterday

NEW YORK, Oct 20 (Reuters) - Proxy advisory firm Institutional Shareholder Services on Monday recommended investors vote down plans for AI company CoreWeave to buy infrastructure company Core Scientific in what was billed as a $9 billion deal.

Investors will vote on October 30. ISS wrote that Core Scientific has achieved considerable success as a standalone company and could continue going it alone.

CoreWeave, which offers cloud infrastructure for artificial-intelligence capabilities, proposed to acquire Core Scientific, which offers computing power, in an all-stock deal with an implied value of $20.40 when it was announced in early July.

Soon after, investor Two Seas Capital said it would vote against the deal, citing concerns with the sale process, deal structure, and valuation. It said the fixed exchange ratio left Core Scientific shareholders vulnerable to fluctuations in the price of CoreWeave shares.

CoreWeave's shares have fallen since July, thereby reducing the deal's value. On Monday, Core Scientific's stock price jumped 4% in premarket trading after having closed trading at $19.85, signaling investors may prefer to have the company stay independent.

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