A Pine Brook Capital Partners affiliate sued Better Holdco in Delaware, challenging provisions of its planned $6.9 billion merger with a blank-check company that would allegedly force major investors to consent to a six-month stock lockup, Bloomberg reports.
“Pine Brook will not receive any benefit in exchange for its forced agreement” to the provision, which resembles “restrictive terms that it rejected previously,” the complaint says. “Conditioning receipt of the merger consideration on a lockup is inequitably coercive.”
The lawsuit also targets Aurora Acquisition, the SPAC that the online mortgage platform plans to merge with.
Announced in May, terms call for Better shareholders to receive $950 million in cash and the remainder in stock of the new company. Existing Better shareholders can elect to receive cash or stock, subject to proration depending on whether cash elections are above or below $950 million. Certain existing holders have committed to elect cash for at least a portion of their shares. After payment of the $950 million and expenses related to the transactions, of approximately $778 million will be used for general corporate purposes.
Aurora’s sponsor will voluntarily forfeit 50 percent of its private placement warrants and modify the remainder to be redeemable at $18 per share. Aurora’s sponsor also has agreed that 20 percent of its founder shares will be subject to price-based vesting. Major stockholders, members of Better’s board and key executives had agreed to enter into lock-up agreements as well. Read more.
