Two Harbors Amends Merger Agreement with CrossCountry Mortgage
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: seekingalpha
- Merger Agreement Revision: Two Harbors Investment (TWO) has amended its all-cash merger agreement with CrossCountry Mortgage, raising the offer to $12 per share from $11.30, which reflects a compelling outcome for TWO shareholders and one of the highest multiples paid for a mortgage REIT.
- Intensified Competition: This increased bid comes amid a takeover battle with UWM Holdings (UWMC), as CrossCountry had previously raised its offer from $10.80 to $11.30, highlighting the competitive landscape in the mortgage sector.
- Transaction Completion Outlook: The deal is expected to close in Q3, with 35 out of 53 state mortgage licensing approvals already obtained, indicating smooth regulatory progress, while the shareholder vote is scheduled for May 19.
- Shareholder Return Strategy: Prior to the closing of the Two Harbors deal, the company intends to pay regular quarterly dividends consistent with past practices for all completed periods, thereby ensuring stable returns for shareholders and enhancing investor confidence.
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Analyst Views on TWO
Wall Street analysts forecast TWO stock price to fall
5 Analyst Rating
1 Buy
4 Hold
0 Sell
Hold
Current: 12.380
Low
10.00
Averages
10.88
High
12.50
Current: 12.380
Low
10.00
Averages
10.88
High
12.50
About TWO
Two Harbors Investment Corp. is a real estate investment trust (REIT) that invests in mortgage servicing rights (MSR), residential mortgage-backed securities and other financial assets. The Company, through its operational platform, RoundPoint Mortgage Servicing LLC, is a servicer of conventional loans. The Company, through its subsidiary, TH MSR Holdings LLC, holds the requisite approvals from Fannie Mae and Freddie Mac to own and manage MSR. Its Agency residential mortgage-backed securities portfolio is comprised of fixed rate mortgage-backed securities backed by single-family and multi-family mortgage loans. Its other assets may include financial and mortgage-related assets other than its target assets, including non-Agency securities (securities that are not issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac), other Agency securities and certain non-hedging transactions that may produce non-qualifying income for purposes of REIT gross income tests.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TWO HARBORS INVESTMENT: MERGER AGREEMENT TERMINATION FEE RAISED TO $51 MILLION FROM $50 MILLION, ACCORDING TO SEC FILING
- Investment Increase: The termination fee for the merger agreement has been raised to $51 million from the previous $50 million.
- Regulatory Filing: This change has been documented in a recent SEC filing related to the merger agreement.
See More
Financial Stocks Decline Slightly on Friday
- Financial Index Decline: The NYSE Financial Index fell by 0.2% on Friday afternoon, indicating cautious sentiment among investors which could lead to capital outflows and reduced market confidence.
- Market Sentiment Weakness: The overall weak performance of financial stocks may be linked to disappointing macroeconomic data and unclear interest rate outlooks, exacerbating market uncertainty and prompting investors to closely monitor upcoming economic indicators.
- Investor Reactions: The decline in financial stocks may lead investors to reassess their portfolios, shifting towards more defensive assets, which could impact market liquidity and overall stability.
- Industry Outlook Concerns: Challenges facing the financial sector may affect future profitability, particularly against a backdrop of rising interest rates and slowing economic growth, necessitating caution among investors regarding related stock investments.
See More
Two Harbors Amends Merger Agreement with CrossCountry Mortgage
- Merger Agreement Revision: Two Harbors Investment (TWO) has amended its all-cash merger agreement with CrossCountry Mortgage, raising the offer to $12 per share from $11.30, which reflects a compelling outcome for TWO shareholders and one of the highest multiples paid for a mortgage REIT.
- Intensified Competition: This increased bid comes amid a takeover battle with UWM Holdings (UWMC), as CrossCountry had previously raised its offer from $10.80 to $11.30, highlighting the competitive landscape in the mortgage sector.
- Transaction Completion Outlook: The deal is expected to close in Q3, with 35 out of 53 state mortgage licensing approvals already obtained, indicating smooth regulatory progress, while the shareholder vote is scheduled for May 19.
- Shareholder Return Strategy: Prior to the closing of the Two Harbors deal, the company intends to pay regular quarterly dividends consistent with past practices for all completed periods, thereby ensuring stable returns for shareholders and enhancing investor confidence.
See More
Two Harbors Rejects UWMC's Acquisition Proposal
- Stock Price Movement: Two Harbors (TWO) saw a 3.9% drop in premarket trading on Monday, reflecting market concerns regarding its board's support for CrossCountry Mortgage's all-cash offer of $11.30 per share, indicating investor apprehension about the acquisition's prospects.
- Acquisition Proposal Comparison: The board unanimously rejected UWM Holdings (UWMC)'s blended cash-and-stock offer, which it valued at approximately $10.96 to $11.13 per share, lower than CrossCountry's bid, demonstrating the board's commitment to shareholder interests.
- Issues with UWMC Proposal: UWMC's acquisition proposal lacked committed financing, and its contradictory statements regarding transaction intent raised concerns for Two Harbors' board, who warned that this could exacerbate employee attrition risks, potentially causing irreparable harm to the company's business and shareholders.
- Advantages of CrossCountry Deal: CrossCountry's acquisition proposal features a fixed all-cash price and fully committed financing, with significant progress made in integration planning, and is expected to close in Q3 2026, indicating higher transaction certainty and business continuity.
See More
TWO HARBORS INVESTMENT CORP - CCM TRANSACTION ANTICIPATED TO FINALIZE IN Q3 2026; MORE THAN 20 STATE APPROVALS RECEIVED
Investment Deal Closure: Two Harbors Investment Corp's deal is expected to close in the third quarter of 2026.
State Approvals: Over 20 state approvals have been obtained for the investment deal.
See More
TWO HARBORS INVESTMENT CORP - BOARD UNANIMOUSLY DISMISSES UPDATED UWMC OFFER
- Board Decision: The Two Harbors Investment Corp. board has unanimously rejected a revised proposal from the UWM Corporation.
- Proposal Details: The rejected proposal was aimed at restructuring or altering existing agreements, but the board found it unsatisfactory.
See More
TWO HARBORS INVESTMENT: MERGER AGREEMENT TERMINATION FEE RAISED TO $51 MILLION FROM $50 MILLION, ACCORDING TO SEC FILING
- Investment Increase: The termination fee for the merger agreement has been raised to $51 million from the previous $50 million.
- Regulatory Filing: This change has been documented in a recent SEC filing related to the merger agreement.
See More
Financial Stocks Decline Slightly on Friday
- Financial Index Decline: The NYSE Financial Index fell by 0.2% on Friday afternoon, indicating cautious sentiment among investors which could lead to capital outflows and reduced market confidence.
- Market Sentiment Weakness: The overall weak performance of financial stocks may be linked to disappointing macroeconomic data and unclear interest rate outlooks, exacerbating market uncertainty and prompting investors to closely monitor upcoming economic indicators.
- Investor Reactions: The decline in financial stocks may lead investors to reassess their portfolios, shifting towards more defensive assets, which could impact market liquidity and overall stability.
- Industry Outlook Concerns: Challenges facing the financial sector may affect future profitability, particularly against a backdrop of rising interest rates and slowing economic growth, necessitating caution among investors regarding related stock investments.
See More
Two Harbors Amends Merger Agreement with CrossCountry Mortgage
- Merger Agreement Revision: Two Harbors Investment (TWO) has amended its all-cash merger agreement with CrossCountry Mortgage, raising the offer to $12 per share from $11.30, which reflects a compelling outcome for TWO shareholders and one of the highest multiples paid for a mortgage REIT.
- Intensified Competition: This increased bid comes amid a takeover battle with UWM Holdings (UWMC), as CrossCountry had previously raised its offer from $10.80 to $11.30, highlighting the competitive landscape in the mortgage sector.
- Transaction Completion Outlook: The deal is expected to close in Q3, with 35 out of 53 state mortgage licensing approvals already obtained, indicating smooth regulatory progress, while the shareholder vote is scheduled for May 19.
- Shareholder Return Strategy: Prior to the closing of the Two Harbors deal, the company intends to pay regular quarterly dividends consistent with past practices for all completed periods, thereby ensuring stable returns for shareholders and enhancing investor confidence.
See More
Two Harbors Rejects UWMC's Acquisition Proposal
- Stock Price Movement: Two Harbors (TWO) saw a 3.9% drop in premarket trading on Monday, reflecting market concerns regarding its board's support for CrossCountry Mortgage's all-cash offer of $11.30 per share, indicating investor apprehension about the acquisition's prospects.
- Acquisition Proposal Comparison: The board unanimously rejected UWM Holdings (UWMC)'s blended cash-and-stock offer, which it valued at approximately $10.96 to $11.13 per share, lower than CrossCountry's bid, demonstrating the board's commitment to shareholder interests.
- Issues with UWMC Proposal: UWMC's acquisition proposal lacked committed financing, and its contradictory statements regarding transaction intent raised concerns for Two Harbors' board, who warned that this could exacerbate employee attrition risks, potentially causing irreparable harm to the company's business and shareholders.
- Advantages of CrossCountry Deal: CrossCountry's acquisition proposal features a fixed all-cash price and fully committed financing, with significant progress made in integration planning, and is expected to close in Q3 2026, indicating higher transaction certainty and business continuity.
See More
TWO HARBORS INVESTMENT CORP - CCM TRANSACTION ANTICIPATED TO FINALIZE IN Q3 2026; MORE THAN 20 STATE APPROVALS RECEIVED
Investment Deal Closure: Two Harbors Investment Corp's deal is expected to close in the third quarter of 2026.
State Approvals: Over 20 state approvals have been obtained for the investment deal.
See More
TWO HARBORS INVESTMENT CORP - BOARD UNANIMOUSLY DISMISSES UPDATED UWMC OFFER
- Board Decision: The Two Harbors Investment Corp. board has unanimously rejected a revised proposal from the UWM Corporation.
- Proposal Details: The rejected proposal was aimed at restructuring or altering existing agreements, but the board found it unsatisfactory.
See More
