Two Harbors Increases Acquisition Proposal with CrossCountry Mortgage
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy TWO?
Source: seekingalpha
Two Harbors Investment Corp (TWO) saw its stock rise by 5.04% as it crossed above the 5-day SMA, reflecting positive investor sentiment following recent acquisition news.
The company has amended its merger agreement with CrossCountry Mortgage, raising the acquisition price from $10.80 to $11.30 per share. This move demonstrates Two Harbors' confidence in the strategic value of the transaction, especially after evaluating a competing proposal from UWM Holdings. The deal is expected to close in the third quarter of 2026, providing clarity for shareholders amid a challenging market environment.
This acquisition proposal not only highlights Two Harbors' proactive approach in securing shareholder interests but also reflects its resilience in navigating market volatility. The upcoming special shareholder meeting on May 19 will be crucial for finalizing the deal.
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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: 11.570
Low
10.00
Averages
10.88
High
12.50
Current: 11.570
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 Updates on CrossCountry Acquisition Proposal
- Acquisition Proposal Increase: Two Harbors has reached an agreement with CrossCountry Mortgage for an acquisition at $11.30 per share in cash, up from the previous $10.80, demonstrating the company's commitment to shareholder interests while terminating the agreement with UWM.
- Financial Performance Decline: The company reported a comprehensive loss of $24.7 million or $0.24 per share for Q1, primarily due to weaker risk asset performance attributed to the outbreak of the Middle East conflict, reflecting the challenging market environment.
- Balance Sheet Condition: As of March 31, the company's book value decreased to $10.57 per share from $11.13 per share on December 31, indicating the impact of market volatility on the company's financial health.
- Cautious Future Outlook: Management expects the transaction to close in the second half of 2026 without financing conditions, although geopolitical tensions are anticipated to remain the primary driver of market sentiment, affecting the short-term economic outlook.
See More
UWMC Delivers Amended Offer to TWO Board
- Cash Election Increase: UWMC has raised the cash election from $11.30 to $12.00 per share, providing a $0.70 premium over CrossCountry's offer, which is more than a 6% increase, aimed at encouraging TWO shareholders to opt for a higher cash return and thereby enhance shareholder value.
- Enhanced Financing Support: The revised offer from UWMC is backed by a $1.3 billion unsecured bridge facility from Mizuho Bank, ensuring sufficient funding for the cash election without any financing conditions, demonstrating UWMC's strong confidence in the transaction.
- Shareholder Rights Protection: UWMC highlights that the TWO Board has failed to adequately represent shareholder interests by increasing deal protection provisions, resulting in higher termination fees for shareholders, urging them to remind the Board of its fiduciary duty to maximize shareholder value.
- Increased Transparency: UWMC plans to file a Form 8-K to disclose the precise terms of its offer, ensuring shareholders receive unfiltered information and avoiding misleading characterizations by the Board, thereby enhancing shareholder confidence in the transaction.
See More
UWM Holdings Corp Secures $1.3 Billion Unsecured Bridge Facility from Mizuho Bank to Support Offer
Financial Support: UWM Holdings Corp has announced a commitment of $1.3 billion in unsecured bridge financing.
Bank Partnership: The financing is being facilitated through a partnership with Mizrahi Tefahot Bank.
See More
Two Harbors (TWO) Q1 2026 Earnings Transcript
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 acquisition price from $10.80 to $11.30 per share, reflecting the company's confidence and strategic value in the transaction.
- Competing Proposal Evaluation: The revision follows a thorough evaluation by the TWO Board of an unsolicited competing proposal received on April 20 from UWM Holdings (UWMC), indicating the company's proactive stance in responding to market competition during the acquisition process.
- Shareholder Special Meeting: A special meeting of shareholders for the transaction is scheduled for May 19, with the deal expected to close in the third quarter, providing shareholders with a clear timeline for decision-making.
- Advisory Team Configuration: Houlihan Lokey is acting as financial advisor for TWO, while Jones Day serves as legal counsel, and Citi is providing exclusive financial advisory services to CrossCountry Mortgage, ensuring the smooth execution and compliance of the transaction.
See More
Two Harbors Accepts Increased Offer of $11.30 per Share from CrossCountry Mortgage
- Increased Acquisition Offer: CrossCountry Mortgage has raised its acquisition offer for Two Harbors Investment to $11.30 per share from the previous $10.80, reflecting strong confidence in the strategic and financial merits of the merger, with the transaction expected to close in Q3 2026.
- Earnings Beat Expectations: Two Harbors reported Q1 EPS of $0.34, exceeding analyst estimates of $0.27 and up from $0.26 in Q4 2025, indicating the company's resilience in a volatile market environment.
- Balance Sheet Changes: As of March 31, 2026, the book value per common share was $10.57, down from $11.13 at December 31, 2025, reflecting the impact of market volatility on the company's assets.
- Decline in Interest Income: Q1 interest income was $88.7 million, down from $89.9 million in the prior quarter and $111.4 million a year ago, highlighting the challenges posed by market conditions and interest rate fluctuations.
See More
Two Harbors Updates on CrossCountry Acquisition Proposal
- Acquisition Proposal Increase: Two Harbors has reached an agreement with CrossCountry Mortgage for an acquisition at $11.30 per share in cash, up from the previous $10.80, demonstrating the company's commitment to shareholder interests while terminating the agreement with UWM.
- Financial Performance Decline: The company reported a comprehensive loss of $24.7 million or $0.24 per share for Q1, primarily due to weaker risk asset performance attributed to the outbreak of the Middle East conflict, reflecting the challenging market environment.
- Balance Sheet Condition: As of March 31, the company's book value decreased to $10.57 per share from $11.13 per share on December 31, indicating the impact of market volatility on the company's financial health.
- Cautious Future Outlook: Management expects the transaction to close in the second half of 2026 without financing conditions, although geopolitical tensions are anticipated to remain the primary driver of market sentiment, affecting the short-term economic outlook.
See More
UWMC Delivers Amended Offer to TWO Board
- Cash Election Increase: UWMC has raised the cash election from $11.30 to $12.00 per share, providing a $0.70 premium over CrossCountry's offer, which is more than a 6% increase, aimed at encouraging TWO shareholders to opt for a higher cash return and thereby enhance shareholder value.
- Enhanced Financing Support: The revised offer from UWMC is backed by a $1.3 billion unsecured bridge facility from Mizuho Bank, ensuring sufficient funding for the cash election without any financing conditions, demonstrating UWMC's strong confidence in the transaction.
- Shareholder Rights Protection: UWMC highlights that the TWO Board has failed to adequately represent shareholder interests by increasing deal protection provisions, resulting in higher termination fees for shareholders, urging them to remind the Board of its fiduciary duty to maximize shareholder value.
- Increased Transparency: UWMC plans to file a Form 8-K to disclose the precise terms of its offer, ensuring shareholders receive unfiltered information and avoiding misleading characterizations by the Board, thereby enhancing shareholder confidence in the transaction.
See More
UWM Holdings Corp Secures $1.3 Billion Unsecured Bridge Facility from Mizuho Bank to Support Offer
Financial Support: UWM Holdings Corp has announced a commitment of $1.3 billion in unsecured bridge financing.
Bank Partnership: The financing is being facilitated through a partnership with Mizrahi Tefahot Bank.
See More
Two Harbors (TWO) Q1 2026 Earnings Transcript
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 acquisition price from $10.80 to $11.30 per share, reflecting the company's confidence and strategic value in the transaction.
- Competing Proposal Evaluation: The revision follows a thorough evaluation by the TWO Board of an unsolicited competing proposal received on April 20 from UWM Holdings (UWMC), indicating the company's proactive stance in responding to market competition during the acquisition process.
- Shareholder Special Meeting: A special meeting of shareholders for the transaction is scheduled for May 19, with the deal expected to close in the third quarter, providing shareholders with a clear timeline for decision-making.
- Advisory Team Configuration: Houlihan Lokey is acting as financial advisor for TWO, while Jones Day serves as legal counsel, and Citi is providing exclusive financial advisory services to CrossCountry Mortgage, ensuring the smooth execution and compliance of the transaction.
See More
Two Harbors Accepts Increased Offer of $11.30 per Share from CrossCountry Mortgage
- Increased Acquisition Offer: CrossCountry Mortgage has raised its acquisition offer for Two Harbors Investment to $11.30 per share from the previous $10.80, reflecting strong confidence in the strategic and financial merits of the merger, with the transaction expected to close in Q3 2026.
- Earnings Beat Expectations: Two Harbors reported Q1 EPS of $0.34, exceeding analyst estimates of $0.27 and up from $0.26 in Q4 2025, indicating the company's resilience in a volatile market environment.
- Balance Sheet Changes: As of March 31, 2026, the book value per common share was $10.57, down from $11.13 at December 31, 2025, reflecting the impact of market volatility on the company's assets.
- Decline in Interest Income: Q1 interest income was $88.7 million, down from $89.9 million in the prior quarter and $111.4 million a year ago, highlighting the challenges posed by market conditions and interest rate fluctuations.
See More
