Aurora stays course on Better.com merger

SPAC said Vishal Garg is on leave to "reflect and refocus," but remains the CEO

Blank check company Aurora Acquisition Corp. said on Monday that Vishal Garg is still Better.com‘s CEO, and that it will keep the proposed merger with the digital mortgage lender.

The communication comes after Garg took leave early this month in response to an onslaught of negative media coverage because he laid off 900 employees via Zoom.  

Garg is on leave to “reflect and refocus” but will remain the company’s CEO, the SPAC said in a document filed with the Securities and Exchange Commission (SEC).

Kevin Ryan, the chief financial officer and a former executive at Morgan Stanley, will continue his duties and help oversee the leadership while Garg is on leave.

“Aurora remains confident in Better and the proposed transaction,” the company said in the document.  

In May, the special purpose acquisition company sponsored by Novator Capital announced plans to make Better.com, a SoftBank Group-backed digital lender, public in a deal that would value the company at nearly $8 billion.

The expectation was that the debut would come later this year. But Garg fired 900 Better.com employees via Zoom, in the span of three minutes, early this month, receiving a tsunami of bad press.

The executive said former employees were “stealing” from the company by being unproductive. Although the executive apologized, the damage was done. Within a week, he took leave.

The company’s layoff came ahead of a financing agreement that provided a $750 million cash injection from SoftBank. The Masayoshi Son-led conglomerate plans to invest another $750 million when Better goes public. But recent events had given rise to questions of whether Aurora would still be interested.

Although the SPAC has reiterated its support for the merger, it remains to be seen at what price the digital mortgage lender will go public.

The company noted in a press release that the new financing agreement does not impact the implied equity value for Better of approximately $6.9 billion. But even that figure has been judged with skepticism by Wall Street analysts and mortgage industry executives.

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