Hedosophia European Growth Fund, the London-listed SPAC vehicle, has entered exclusive negotiations to acquire a controlling stake in Nutmeg's parent operations and merge them with a broader digital wealth management platform, according to people briefed on the discussions. The proposed transaction would create a combined entity valued at approximately £3.5 billion and mark the first significant SPAC-driven fintech deal on the London Stock Exchange since the FCA introduced its reformed listing rules for shell companies.

The deal structure is understood to involve Hedosophia's existing £600 million cash trust supplemented by a £1.2 billion PIPE commitment from a consortium of institutional investors including Baillie Gifford and Fidelity International. Ian Osborne, Hedosophia's founder and a long-standing technology investor, has positioned the SPAC as a vehicle to consolidate fragmented UK wealthtech assets into a single platform capable of competing with established wealth managers and US robo-advisory firms.

Market participants have expressed cautious optimism about the transaction, noting that London's SPAC market has struggled to gain traction compared with its US counterpart. The FCA's 2024 reforms, which relaxed redemption requirements and introduced more flexible shareholder voting structures, were specifically designed to encourage deals of this nature. If completed, the merger would provide a significant test case for whether SPACs can serve as a viable alternative listing route for UK fintech companies seeking public market access.