DEFA14A: Great Ajax Corp. Sets Record Date for Stockholder Vote on Rithm Capital Transaction

Great Ajax Corp. has set April 22, 2024, as the record date for its stockholder meeting to vote on the proposed strategic transaction with Rithm Capital Corp.

Summary

• Great Ajax Corp. announced a record date of April 22, 2024, for its stockholder meeting to vote on matters related to the strategic transaction with Rithm Capital Corp.
• The meeting, expected to occur on May 20, 2024, will include votes on issuing common stock to exchanging investors above the NYSE's 19.99% cap.
• Stockholders will also vote on issuing common stock and warrant shares to Rithm, which could result in a change of control.
• The election of four directors to serve until the 2025 annual meeting will be voted on.
• A vote will be held on entering into a Management Agreement with RCM GA Manager LLC, an affiliate of Rithm, to become the company's external manager.
• Stockholders will vote on adopting Amendment No. 1 to the 2016 Equity Incentive Plan.
• The appointment of Moss Adams LLP as the independent public accounting firm for the fiscal year ending December 31, 2024, will also be ratified.
• The transaction is subject to customary closing conditions and stockholder approval.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. The strategic transaction with Rithm could be beneficial, but there are risks associated with potential dilution and change of control.

Positives

• The strategic transaction with Rithm Capital Corp. could bring potential benefits to Great Ajax Corp.
• The appointment of an external manager (RCM GA Manager LLC) may improve operational efficiency.
• The ratification of Moss Adams LLP as the independent auditor provides assurance on financial reporting.

Negatives

• The issuance of common stock to Rithm could result in a change of control, which may not be favored by all stockholders.
• Issuing common stock above the 19.99% NYSE cap could dilute existing shareholders' equity.

Risks

• The transaction is subject to customary closing conditions and stockholder approval, creating uncertainty.
• Forward-looking statements are subject to numerous assumptions, risks, and uncertainties that could cause actual results to differ materially.
• Factors that could cause differences include those set forth in the section entitled 'Risk Factors' in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC.

Future Outlook

The company is focused on obtaining stockholder approval for the strategic transaction with Rithm Capital Corp. and completing the transaction, subject to customary closing conditions.

Industry Context

The transaction reflects a trend of consolidation and strategic partnerships within the real estate investment trust (REIT) sector, as companies seek to enhance their scale, diversify their operations, and improve their access to capital.

Comparison to Industry Standards

• External management agreements are common in the REIT industry, but their terms and potential conflicts of interest are often scrutinized by investors.
• Issuing stock above the 19.99% threshold requires shareholder approval due to potential dilution, a standard practice to protect shareholder interests.
• Rithm Capital's involvement brings expertise in real estate, credit, and financial services, similar to other diversified REITs like Blackstone Mortgage Trust (BXMT) or Apollo Commercial Real Estate Finance (ARI).

Stakeholder Impact

• Shareholders will be impacted by the vote on the strategic transaction and potential dilution.
• Employees may be affected by the change in management structure.
• The transaction could impact the company's relationships with its customers, suppliers, and creditors.

Next Steps

• Great Ajax will file a proxy statement with the SEC and furnish it to stockholders.
• Stockholders are urged to read the proxy statement before making any voting decision.
• The company will hold the stockholder meeting on May 20, 2024, to vote on the proposed transaction.

Key Dates

Keywords

Rithm Capital Corp, strategic transaction, stockholder meeting, common stock, warrant shares, change of control, external manager, proxy statement, Great Ajax Corp, NYSE