Blank-check firm Aurora Acquisition Corp. wants to extend the deadline for completing its merger deal with struggling digital mortgage lender Better.com by six months for the third time, further dimming the prospects for the deal to go through.
Novator Capital-sponsored Aurora shareholders will vote on an undisclosed date to extend the deadline by which the company “must either consummate a merger, share of exchange asset acquisition, share purchase, reorganization or similar business combination with one or more business” to September 30, 2023 from March 8,2023, according to a Securities and Exchange Commission filing.
Although the two companies entered into an agreement to merge in May 2021, the board of directors does not believe there will be sufficient time to complete the transaction by the given deadline.
If the extension proposal is not approved and the two firms don’t complete the merger by March of this year, it will cease all operations other than for the purpose of winding up and redeeming the public shares and Novator private placement shares at a per-share price payable in cash, the filing noted.
The filing comes a week after Aurora received a note from the listing qualifications department of the Nasdaq Stock Market stating that the company failed to hold an annual meeting with stockholders within 12 months after its fiscal year ended December 31.
This is not the first time the companies have explored alternatives to the merger.
“Aurora and Better are in discussions regarding alternative financing arrangements for Better pursuant to which the merger agreement and related transactions would be terminated and Better would remain a private company,” a filing from the SEC showed in August, which is when the two firms announced a second extension of their merger agreement deadline to March 2023 from September 2022.
Aurora planned to take Better.com public in the fourth quarter of 2021, but the deal is unlikely to happen given market conditions.
Better.com capitalized on the unprecedented refi boom and homeowners’ growing comfort in an all-digital mortgage experience, but it started losing money as rates started rising.
The digital lender originated $9.8 billion in the first nine months of 2022, declining 76% from the same period in 2021, according to Inside Mortgage Finance, which ranked Better.com as the 42nd-largest mortgage originator in the country.
Its founder and CEO, Vishal Garg, gained public infamy after laying off 900 employees in a dystopian Zoom call in December 2021. Since then, the lender had at least three rounds of layoffs in March, April and August 2022.
