Billionaire behind collapsed Icelandic bank lines up Spac payday

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An Icelandic billionaire who made a fortune in the country’s doomed banking boom is closing in on a deal with a digital mortgage provider that infamously sacked 900 staff over Zoom.

SoftBank-backed start-up Better.com recently faced an onslaught of criticism after its boss Vishal Garg fired hundreds of staff on a video call in December. It is now set to go public with a valuation of $7.7bn in New York through a merger with a “blank cheque” firm backed by Iceland’s only billionaire, Thor Bjorgolfsson.

Mr Bjorgolffson, who owns mansions in Notting Hill worth an estimated £40m, could net $70m (£52m) from the deal. His involvement has not been previously reported.

Plans for Better.com to merge with Aurora Acquisition Corporation, a special purpose acquisition company (Spac) owned by Mr Bjorgolfsson’s private equity firm Novator, first emerged in May. The merger was delayed last month after the mass sacking by Mr Garg. However, it is understood completion of the deal is now imminent.

One person close to the tie-up said: “The deal has been agreed and would have been completed by now but the sacking of Better.com staff by Zoom has delayed it. But both boards of directors have approved the deal and so it will go through any day now.”        

Aurora said in US regulatory filings last week that it “remains confident in Better and the proposed transaction” even as Mr Garg takes “a break to reflect and refocus” following the mass layoffs.  

Mr Bjorgolfsson was the biggest owner of Icelandic banking group Landsbanki before it failed in October 2008, costing 300,000 British savers who used its UK subsidiary Icesave an estimated £4bn.

He is facing legal action in Iceland for his alleged role in the collapse, with claimants seeking £240m in damages. The trial is likely to take place in spring and Mr Bjorgolfsson denies wrongdoing.

The 54-year-old, who lost almost all of his fortune when Iceland nearly went bankrupt but is now worth an estimated $2.2bn, became Iceland’s first billionaire in 2007 and counts David Beckham and film director Guy Ritchie among his closest friends. 

The trio go on annual fishing holiday trips in Iceland and were pictured together earlier this year watching England’s Euro semi-final victory over Denmark at Wembley.  

Better.com sacked 9pc of its workforce by Zoom shortly after it received a $750m cash injection from investors in the deal.

Mr Garg later said: “I failed to show the appropriate amount of respect and appreciation for the individuals who were affected.”

His outbursts have been overlooked by many investors who point to his success in building Better.com into a multibillion-dollar business.

Spokesmen for Mr Garg and Mr Bjorgolffson did not respond to requests for comment. 

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