Ademi LLP is investigating Great Ajax (NYSE: AJX) for possible breaches of fiduciary duty and other violations of law in its private placement and its transaction with Ellington Financial.
In the transaction, Great Ajax shareholders will receive only 0.5308 shares of Ellington Financial common stock, or approximately 12.5 million shares of Ellington Financial common stock in the aggregate. Ellington Financial’s common stock closing price on June 30, 2023 implies an offer price of $7.33 per share of Great Ajax common stock. Upon the closing of the transaction, Ellington Financial stockholders are expected to own approximately 84% of the combined company’s stock, while Great Ajax stockholders are expected to own approximately 16% of the combined company’s stock. The transaction agreement unreasonably limits competing bids for Great Ajax by imposing a significant penalty if Great Ajax accepts a superior bid. Great Ajax insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Great Ajax’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Great Ajax.