Key facts
- Better Home & Finance Holding Company will not challenge founder Vishal Garg's consent solicitation.
- The decision was made by a special committee of Better's board of directors.
- Garg claimed to have majority shareholder consent for his solicitation.
- Garg plans to add venture capitalists Bing Gordon and Steve Sarracino to the board.
- Garg's plan includes raising cost-saving targets to $60 million.
- Garg's group is seeking approval for a $30 million stock buyback program.
Better Home & Finance Holding Company will not contest founder Vishal Garg's campaign to oust five board members and reinstate him in a leadership capacity. The company's special board committee announced Monday it would not challenge Garg's consent solicitation, citing the financial and temporal costs of a prolonged dispute as reasons for acting in the best interests of stockholders.
Garg, who was removed as CEO in August and replaced by activist investor Daniel Lewis, had claimed in a September filing to have secured the majority of shareholder consent needed to proceed. The Garg Group stated that the committee had "decided to heed the will of shareholders."
Under Garg's proposed plan, he would lead product, platform, and innovation while a search for a new CEO commences. The strategy also involves increasing annual cost-saving targets from $45 million to $60 million, engaging an advisory firm to optimize operations, solidifying partnerships for the Tinman platform, and expanding the home equity line of credit business. Additionally, Garg's group is seeking approval for a $30 million stock buyback program.
The resolution marks a significant shift in control for the digital mortgage firm, which has navigated a challenging origination market, workforce reductions, and scrutiny of its leadership and business model since its SPAC merger. The company's stock was trading up 0.76% in pre-market activity on Monday at $11.88, after having fallen 64% in the preceding six months.