Two Harbors Investment Corp. (NYSE: TWO), the mortgage servicing rights-focused real estate investment trust, has rejected the latest attempt by UWM Holdings Corp. (NYSE: UWMC) to secure a merger, calling the company’s new offer of $12.50 per share an “illusory, predatory and unactionable proposal.”
In a statement, the Two Harbors board of directors noted that if has not terminated its earlier agreement to merge with UWM, its common stockholders would have received UWM stock worth $7.58 per share. But in merging with CrossCountry Mortgage (CCM), Two Harbors’ common stockholders will receive $12.00 per share in a deal that included “financing, regulatory and closing certainty.”
The Two Harbors board also complained that UWM’s offer is structured to benefit UWM and not Two Harbors, noting the company repeatedly failed to explain how it would be able to close the deal in 60 days. The board also questioned the financial health of UWM, observing the company’s stock is down by more than 40% in the last six months while Fitch downgraded its outlook twice and Bloomberg calculated the company’s “1-year probability of default has doubled in three weeks.”
The board further criticized UWM for suggesting it had “ulterior motives for pursuing a transaction with CCM,” adding that no member of the Two Harbors board “is expected to continue with the combined company, and no offers of employment have been made to, nor have any discussions taken place regarding employment of, any TWO named executive officer.”
UWM did not immediately comment on the Two Harbors rejection.
0 Comments