SPACs and Mergers Under the Microscope: Legal Risks and Misvaluation in 2025 Deals

The merger and acquisition landscape of 2025 has become a battleground for shareholder activists, as legal investigations into high-profile transactions threaten to upend expected outcomes. Three deals—Colombier Acquisition Corp. II's (CLBR) SPAC merger with GrabAGun, FARO Technologies' sale to AMETEK, and Charter Communications' Cox Communications merger—are now under scrutiny for potential misvaluation, inadequate disclosures, and breaches of fiduciary duty. For investors, these cases highlight the growing risks of betting on deals that may not deliver promised value.

CLBR-GrabAGun: SPAC's Pivotal Moment

Colombier Acquisition Corp. II, a SPAC focused on niche markets, is merging with GrabAGun, an online firearms retailer, in a deal valued at $150 million. Current GrabAGun equity holders will receive $100 million in stock and $50 million in cash from the combined entity, which plans to list on the NYSE under ticker symbols "PEW" and "PEWW."

The deal, first announced in January 2025, faces a critical hurdle: an investigation by Halper Sadeh LLC, which argues that shareholders may not be receiving “the best possible terms.” The firm alleges that the cash-and-stock structure could undervalue GrabAGun's equity, particularly if the SPAC's post-merger stock underperforms. The investigation also questions whether key risks—such as regulatory headwinds in the firearms industry—are adequately disclosed.

Investors should note that SPACs often face post-merger share price declines due to overvaluation concerns. could soon test this hypothesis.

FARO-AMETEK: Is Cash Always King?

FARO Technologies' sale to AMETEK for $44 per share in cash appears straightforward, but Halper Sadeh LLC is probing whether the offer fairly compensates shareholders. FARO's stock traded at $38.40 on May 1, 2025, suggesting a 15% premium. However, the firm argues that undisclosed risks—such as AMETEK's integration challenges or FARO's competitive position in 3D measurement technology—could warrant higher compensation.

For FARO investors, the question is whether the cash offer is a “fire sale” price. might reveal if the market already discounts risks not reflected in the deal terms.

CHTR-Cox: A $34.5 Billion Crossroads

Charter Communications' $34.5 billion merger with Cox Communications is under intense scrutiny. Halper Sadeh LLC alleges that the deal's structure—where Cox retains a 23% equity stake post-merger—leaves Charter shareholders with diluted stakes and inadequate protections. The investigation highlights Cox's $12.6 billion in debt and questions whether synergy targets are achievable.

The merger's success hinges on regulatory approval and synergy execution. Analysts estimate a potential 5–10% swing in Charter's valuation depending on litigation outcomes. Meanwhile, Charter's aggressive expansion of Spectrum Mobile and fiber networks must counter rising competition from fixed wireless providers.

Kaskela Law LLC's separate probe into governance failures adds another layer of risk. A misstep here could lead to penalties or reputational damage, further pressuring Charter's stock.

Investment Takeaways: Proceed with Caution

1. SPACs Require Extra Scrutiny: Deals like CLBR-GrabAGun often lack the transparency of traditional IPOs. Investors should demand clarity on post-merger valuation metrics and regulatory risks.
2. Cash Isn't Always Safe: The FARO case underscores that even all-cash offers may underprice assets if undisclosed liabilities exist.
3. Debt and Synergies Matter: For Charter's Cox merger, investors must weigh debt loads and synergy timelines against regulatory delays. A could shed light on potential holdups.
4. Hedge Against Uncertainty: Consider put options or inverse ETFs to mitigate downside risk if litigation drags on.

Final Analysis

These investigations reveal a broader truth: in a consolidating market, corporate deals are increasingly vulnerable to legal pushback over valuation and transparency. Investors in CLBR, FARO, and CHTR should treat these transactions not as sure bets but as high-risk ventures. Monitor legal milestones, hedge exposures, and prioritize deals with clear upside potential beyond the merger's stated terms. In 2025's merger landscape, due diligence isn't just an option—it's survival.