By Pamela Barbaglia and Gwénaëlle Barzic

LONDON, (Reuters) – Auchan, a French retailer of food, explored a partnership with a company that issues blank checks. The deal was backed by Xavier Niel, a telecoms mogul and Matthieu Pigasse. This followed a failed tie-up with a rival Carrefour Three sources with knowledge of the subject told Reuters.

According to sources, discussions between Auchan’s billionaire Mulliez family and 2MX Organic, which launched December and was the pioneer of Europe’s special acquisitions companies (SPACs), were held this summer.

Auchan would have been listed if there had been a tie-up. This would have provided currency for deals to make and funds to restructure its hypermarket-oriented business. It would have been an enormous leap for 2MX Organic which was funded by investors who pledged to make Europe a leader in organic foods.

However, talks fell apart as Auchan tried to establish an industry alliance with Carrefour, which could have resulted in cost savings and purchasing synergies. Sources said that this was despite the fact that the matter remains confidential.

The plan to merge with Carrefour in order to create the French market leader, with 110 billion euro ($127 billion) per year, was canceled by Auchan at the beginning of October. 2MX Organic talks are not active anymore, sources claimed.

Auchan’s spokesperson denied any discussions with 2MX Organic and stated that the company wasn’t for sale.

2MX Organic did not respond to our request for comment.

2MX Organic’s shares, which are also backed Moez Alexandre Zouari the entrepreneur, soared after their Dec. 9 market debut, making them France’s most important IPO for 2020.

2MX Organic was dubbed the Tesla (NASDAQ: ) of responsible consumerism by its owners. Sources said that 2MX Organic had been seeking a potential target for merger since the beginning of this year but failed to locate one amid the decline in interest in SPACs following the United States’ regulatory crackdown.

Sources claimed that talks with Auchan did not resume after Carrefour’s debacle. TwoMX Organic had now been added to the mix.

SPACs are able to raise capital on the stock market by buying and growing private businesses. However, investor interest in SPACs has declined due to poor performances and the escalating number of class action lawsuits.

According to one source, “SPAC sponsors are looking for targets and they have been looking at deals they haven’t considered before.” “Some people are trying to change their core focus so they can fulfill their mission.”

Only 85 SPACs globally listed in the third quarter and raised $14 billion. That’s down from 309 SPACs that had registered for $95 billion the previous quarter according to Refinitiv data.

SPACs are seeing their shares drop so much that they trade at $10 below what they originally were priced.

($1 = 0.8661 euros)