Crypto lending firm Vauld has rejected a long-standing acquisition offer from its larger competitor, Nexo, according to various reports on Jan. 5.
In a private letter, Vauld co-founder and CEO Darshan Bathija told Nexo that his company would reject a final proposal put forward by Nexo.
Vauld said that Nexo had failed to provide an assessment of its solvency. It also expressed concerns over how Nexo would handle U.S.-based Vauld customers, as Nexo stated in December that it will stop serving the country’s residents. Vauld concluded that Nexo’s revised proposals have failed to assure either matter.
Bathija wrote in the rejection letter:
“We have taken the terms of the Final Nexo Proposal into consideration and further consulted with the [committee of creditors], and we unanimously do not accept your proposal as it stands.”
Nexo’s acquisition offer has been under consideration since last July. Vauld was one of several companies that filed for bankruptcy last summer in the aftermath of the collapse of Celsius — an event that caused it to turn to Nexo for assistance.
However, the planned deal hit roadblocks in the months that followed, and Nexo revised its proposal multiple times. Just hours before reports of Vauld’s final rejection on Jan. 5, Nexo published an open letter containing a final offer for Vauld.
Nexo called that proposal “the best possible path forward” and “the only path forward.” The final offer would have seen Nexo acquire Vauld’s customer base, its crypto assets, its clients’ crypto assets, its cash, and various other assets and liabilities.
The deal would have onboarded Vauld customers as “New Nexo Customers.” It would have also transferred owed balances into accounts called “New Nexo Accounts.”
Nexo additionally said in yesterday’s letter that it plans to enforce a breakup clause that will compel Vauld to pay $20 million. Though the two companies initially signed a 60-day exclusivity agreement, that agreement was later extended another 30 days into October 2022. It is unclear whether the companies extended the agreement even further, or whether Nexo believes that Vauld broke the agreement earlier.
Last month, reports conflicted on whether Nexo and Vauld would proceed with the planned deal. While Vauld said negotiations had failed, Nexo suggested that it was still willing to pursue a deal and submitted a revised proposal.
This week’s developments have ended the conflict, and it appears that Vauld will instead work with a fund manager maligned by Nexo. Vauld was said to owe more than $400 million to its customers based on crypto prices at its collapse.