Terra Property Trust Inc., a New York City-based real estate investment trust focused on commercial real estate, reaffirmed its commitment to merge with Western Asset Mortgage Capital Corp. (NYSE: WMC) after the latter received an unsolicited acquisition bid from another REIT, AG Mortgage Investment Trust Inc. (NYSE: MITT).
“TPT believes that its proposed combination with WMC represents the most compelling transaction for stockholders of WMC,” said the company in an unattributed press statement. “Assuming the combined company trades at the average price to book of the Diversified Commercial Mortgage REITs, the implied per share consideration to WMC shareholders is $15.40, an 84% premium to WMC’s share price as of July 12th. The TPT Merger does not accelerate WMC’s convertible debt. Unlike what is set forth in the MITT Materials, the TPT Merger would not accelerate WMC’s convertible debt.”
The company added, “TPT and WMC have obtained the consents of their lenders to the transaction contemplated by the TPT Merger. To TPT’s knowledge, MITT has not obtained the consent of WMC’s lenders, subjecting the MITT Proposal to greater deal risk and potentially subjecting the combined company to costly refinancings or an inability to obtain lender consents.”
Earlier this week, AG Mortgage Investment President and CEO T.J. Durkin sent a letter to the Western Asset board of directors stating that merging with his company “would result in a focused, residential mortgage REIT with an optimized capital structure and significant growth potential and value-creating opportunities for the combined company’s stockholders. Our complementary core competences in residential mortgage credit would establish an even more efficient and competitive company.”
