Legal move threatens Pagaya SPAC merger

Pagaya founders Photo: Roy Perry

Two US law firms are examining whether the deal over-dilutes EJF Acquisition Corp.'s shareholders.

Two US law firms have written to shareholders in EJF Acquisition Corp. (Nasdaq: EJFA), a SPAC that is due to merge with Israeli fintech company Pagaya Technologies, informing them that they are investigating claims of possible over-dilution of shares. The firms say they are examining whether the directors of EJF Acquisition Corp. were in breach of their fiduciary duty to the company's shareholders in agreeing to a deal whereby the shareholders will own less than 6% of the combined company. Pagaya is valued at $8.5 billion for the purposes of the merger.

Pagaya officially announced last Wednesday that it would become a publicly listed company through a merger with EJF. The merger is due to close in early 2022, subject to approval by shareholders. UBS Investment Bank and Barclays served as financial and capital markets advisors to EJF Acquisition Corp.. JP Morgan Securities exclusively advised Pagaya on the deal. 

Pagaya was founded in 2016 by CEO Gal Krubiner, Yahav Yulzari (a former goalkeeper for Bnei Yehuda Tel Aviv FC), and Avital Pardo. The company deals in peer-to-peer lending and management of alternative investments. It has raised $146 million to date including $102 million in a Series D financing round last year led by the Singapore Sovereign Wealth Fund (GIC). The company reportedly manages over $2 billion in various debt instruments.

Published by Globes, Israel business news - en.globes.co.il - on September 19, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Pagaya founders Photo: Roy Perry
Pagaya founders Photo: Roy Perry
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