Key facts
- Better Home & Finance Holding Co. adopted a poison pill defense strategy.
- The plan is designed to prevent former CEO Vishal Garg and an undisclosed investor group from taking control.
- The poison pill activates if any entity acquires 15% or more of Better's stock or voting power.
- Better previously sued Garg, alleging violations of securities laws and an 'illegal, scorched-earth campaign' to regain his CEO position.
- Garg was removed as CEO on August 3, but later claimed to have majority shareholder support.
Better Home & Finance Holding Co. has implemented a poison pill defense strategy, a move designed to thwart attempts by former CEO Vishal Garg and an associated group of investors to seize control of the company. The shareholder rights plan, announced Thursday, aims to prevent any single entity from acquiring a substantial stake without paying a premium or fully disclosing their intentions and arrangements.
The company stated that the plan was adopted in response to Garg and an undisclosed group of investors who are "acting together" to obtain "abrupt control" of Better. The rights plan will be triggered if any person or group acquires 15% or more of Better's common stock or total voting power, allowing remaining shareholders to purchase additional shares at a discount, thereby diluting the acquirer's stake.
This defensive measure escalates the ongoing power struggle between Garg and the current board. Better had previously sued Garg in federal court, accusing him of violating securities laws through an "illegal, scorched-earth campaign" to replace directors and reinstate himself as CEO. Garg was removed from his CEO position effective August 3, but subsequently claimed to possess shareholder declarations representing a majority of the company's voting power.
Better has publicly criticized Garg's tenure, citing over $1.5 billion in net losses since 2022 and a stock decline exceeding 90% during his leadership, while also alleging governance and securities issues. Garg has disputed these claims. A lawsuit filed by Better in the U.S. District Court for the Southern District of New York alleges that Garg secretly formed a coalition of shareholders shortly after his removal to replace directors and regain his CEO position without proper disclosure. Better also accuses Garg of issuing misleading communications to shareholders regarding his level of support.