Two Harbors Rejects UWM's Revised Proposal Amid Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy TWO?
Source: seekingalpha
- Proposal Rejection: Two Harbors Investment's (TWO) board unanimously rejected UWM Holdings' (UWMC) revised proposal, citing unresolved 'core deficiencies and material risks,' indicating a strong distrust of UWMC's intentions.
- Stock Price Reaction: Following the rejection of the proposal, TWO's stock fell 2.1% in premarket trading, while UWMC's stock remained relatively unchanged, reflecting the market's negative sentiment towards the board's decision.
- Cash Election Option: UWMC emphasized offering TWO shareholders a cash option of $12.50 per share with no cap, although TWO's board questioned UWMC's ability to close a transaction within 60 days, raising doubts about UWMC's commitments.
- Proxy Voting Controversy: TWO's board expressed strong dissatisfaction with Institutional Shareholder Services (ISS) for failing to recommend shareholders support the UWMC proposal, asserting that ISS's conclusion was incorrect and reiterating that the CCM transaction remains 'the most compelling, certain, and actionable path forward.'
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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: 12.600
Low
10.00
Averages
10.88
High
12.50
Current: 12.600
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 Shareholder Files Suit Over Proxy Statement
- Shareholder Lawsuit: Two Harbors shareholder George Assad has filed a lawsuit alleging that the company issued an incomplete and misleading proxy statement regarding its merger with CrossCountry Mortgage, seeking to delay the special stockholder meeting set for May 19, 2026, until a corrective disclosure is made.
- Merger Agreement Controversy: The lawsuit claims that Two Harbors' management abandoned an earlier merger agreement with UWM Holdings because UWMC did not plan to retain TWO's management, highlighting potential conflicts of interest between management and shareholders.
- Court Requests: The shareholder is asking the court to prevent Two Harbors from completing the merger with CrossCountry and to invalidate votes already cast, requiring a redo of the vote to ensure shareholders can make informed decisions.
- Market Reaction: Following the lawsuit announcement, Two Harbors' stock slipped 0.8% to $12.50 in premarket trading, matching UWMC's latest proposal price, indicating market concerns regarding the merger's prospects.
See More
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- Nebius Revenue Surge: Nebius reported a staggering 684% year-over-year revenue increase to $399 million for the quarter ending March 31, driven by soaring artificial intelligence expenditures, although it posted an adjusted net loss of $100.3 million, its GAAP earnings per share of $2.82 reflect strong market demand and growth potential.
- Two Harbors Rejects Acquisition: Two Harbors Investment's board unanimously rejected UWM Holdings' revised acquisition proposal, citing unresolved “core deficiencies and material risks” from previous proposals, leading to a 2.1% decline in its stock price during premarket trading, showcasing the company's cautious stance on acquisitions.
- Pfizer Drug Approval: Pfizer announced that its hemophilia therapy Hympavzi received marketing authorization from the European Commission to expand its label for use in adolescents, now indicated in all 27 EU member states as well as Iceland, Liechtenstein, and Norway for hemophilia A or B patients aged 12 and older, despite a 0.50% drop in premarket trading, this approval could open new market opportunities for the company.
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Two Harbors Rejects UWM's Revised Proposal Amid Concerns
- Proposal Rejection: Two Harbors Investment's (TWO) board unanimously rejected UWM Holdings' (UWMC) revised proposal, citing unresolved 'core deficiencies and material risks,' indicating a strong distrust of UWMC's intentions.
- Stock Price Reaction: Following the rejection of the proposal, TWO's stock fell 2.1% in premarket trading, while UWMC's stock remained relatively unchanged, reflecting the market's negative sentiment towards the board's decision.
- Cash Election Option: UWMC emphasized offering TWO shareholders a cash option of $12.50 per share with no cap, although TWO's board questioned UWMC's ability to close a transaction within 60 days, raising doubts about UWMC's commitments.
- Proxy Voting Controversy: TWO's board expressed strong dissatisfaction with Institutional Shareholder Services (ISS) for failing to recommend shareholders support the UWMC proposal, asserting that ISS's conclusion was incorrect and reiterating that the CCM transaction remains 'the most compelling, certain, and actionable path forward.'
See More
TWO Board Unanimously Recommends Stockholders Vote FOR CCM Transaction
- Transaction Value Analysis: The TWO Board unanimously believes that the transaction with CrossCountry, offering $12.00 per share in cash, significantly exceeds UWMC's proposal of $7.58 per share, demonstrating the superior value and certainty of the CCM deal, which prioritizes shareholder interests.
- Shareholder Benefit Assurance: The TWO Board emphasizes that opting for the CCM transaction will provide all common stockholders with a 21% premium and has already secured 35 state regulatory approvals, ensuring a smooth transaction and reducing risks faced by shareholders.
- UWMC Proposal Deficiencies: The TWO Board points out that UWMC's proposal fails to address the core deficiencies and risks previously identified, and its deteriorating financial condition, with Fitch downgrading its outlook twice, indicates significant uncertainty surrounding UWMC's transaction.
- Regulatory Compliance Issues: The TWO Board questions UWMC's claim of closing within 60 days, asserting that it has not provided necessary regulatory approvals and lacks transparency, urging shareholders to scrutinize UWMC's true intentions and capabilities.
See More
Schall Law Firm Investigates Claims for Two Harbors Investors
- Investigation Launched: The Schall Law Firm has announced an investigation into Two Harbors Investment Corp. focusing on potential violations of securities laws, particularly regarding false or misleading statements that could undermine investor confidence.
- Investor Rights Protection: This investigation aims to support shareholders who have suffered losses, encouraging affected investors to participate, indicating that the company faces legal risks that may impact its stock performance.
- Legal Consultation Services: Schall Law Firm offers free consultations to help investors understand their rights, demonstrating a commitment to protecting shareholder interests while potentially attracting more clients to participate in litigation.
- Securities Litigation Expertise: As a firm specializing in securities class actions, the investigation by Schall may trigger broader legal actions, affecting Two Harbors' market reputation and future operations.
See More
UWMC Proposes Superior Acquisition Offer Over CCM
- Cash Acquisition Proposal: UWMC has proposed to acquire Two Harbors at $12.50 per share in cash, which is clearly superior to CCM's offer of $12.00 per share, expected to provide higher returns for shareholders and enhance market competitiveness.
- Shareholder Voting Appeal: UWMC urges Two Harbors shareholders to vote against the CCM merger proposal at the upcoming special meeting, emphasizing that only by voting no can they compel the board to engage in effective negotiations with UWMC to maximize value.
- Transaction Completion Timeline: UWMC states that, barring further obstruction from the Two Harbors board, it anticipates closing the transaction within approximately two months of signing an agreement, showcasing its strong regulatory relationships and market execution capabilities.
- Role as Value Driver: UWMC highlights its critical role in enhancing shareholder value for Two Harbors, noting that without its ongoing acquisition proposals, Two Harbors might have sold for as low as $10.80 per share, underscoring the strategic significance of its offers.
See More
Two Harbors Shareholder Files Suit Over Proxy Statement
- Shareholder Lawsuit: Two Harbors shareholder George Assad has filed a lawsuit alleging that the company issued an incomplete and misleading proxy statement regarding its merger with CrossCountry Mortgage, seeking to delay the special stockholder meeting set for May 19, 2026, until a corrective disclosure is made.
- Merger Agreement Controversy: The lawsuit claims that Two Harbors' management abandoned an earlier merger agreement with UWM Holdings because UWMC did not plan to retain TWO's management, highlighting potential conflicts of interest between management and shareholders.
- Court Requests: The shareholder is asking the court to prevent Two Harbors from completing the merger with CrossCountry and to invalidate votes already cast, requiring a redo of the vote to ensure shareholders can make informed decisions.
- Market Reaction: Following the lawsuit announcement, Two Harbors' stock slipped 0.8% to $12.50 in premarket trading, matching UWMC's latest proposal price, indicating market concerns regarding the merger's prospects.
See More
Alibaba Reports Weak Earnings Growth Amid AI Spending
- Alibaba Earnings Report: Alibaba's fiscal fourth-quarter results revealed a mere 3% revenue growth, while on a like-for-like basis, excluding disposed businesses, it would have shown an 11% year-over-year increase; however, profitability sharply declined due to increased AI-related spending, compressing adjusted EBITA and net income, indicating significant pressure on earnings in a rapidly evolving market.
- Nebius Revenue Surge: Nebius reported a staggering 684% year-over-year revenue increase to $399 million for the quarter ending March 31, driven by soaring artificial intelligence expenditures, although it posted an adjusted net loss of $100.3 million, its GAAP earnings per share of $2.82 reflect strong market demand and growth potential.
- Two Harbors Rejects Acquisition: Two Harbors Investment's board unanimously rejected UWM Holdings' revised acquisition proposal, citing unresolved “core deficiencies and material risks” from previous proposals, leading to a 2.1% decline in its stock price during premarket trading, showcasing the company's cautious stance on acquisitions.
- Pfizer Drug Approval: Pfizer announced that its hemophilia therapy Hympavzi received marketing authorization from the European Commission to expand its label for use in adolescents, now indicated in all 27 EU member states as well as Iceland, Liechtenstein, and Norway for hemophilia A or B patients aged 12 and older, despite a 0.50% drop in premarket trading, this approval could open new market opportunities for the company.
See More
Two Harbors Rejects UWM's Revised Proposal Amid Concerns
- Proposal Rejection: Two Harbors Investment's (TWO) board unanimously rejected UWM Holdings' (UWMC) revised proposal, citing unresolved 'core deficiencies and material risks,' indicating a strong distrust of UWMC's intentions.
- Stock Price Reaction: Following the rejection of the proposal, TWO's stock fell 2.1% in premarket trading, while UWMC's stock remained relatively unchanged, reflecting the market's negative sentiment towards the board's decision.
- Cash Election Option: UWMC emphasized offering TWO shareholders a cash option of $12.50 per share with no cap, although TWO's board questioned UWMC's ability to close a transaction within 60 days, raising doubts about UWMC's commitments.
- Proxy Voting Controversy: TWO's board expressed strong dissatisfaction with Institutional Shareholder Services (ISS) for failing to recommend shareholders support the UWMC proposal, asserting that ISS's conclusion was incorrect and reiterating that the CCM transaction remains 'the most compelling, certain, and actionable path forward.'
See More
TWO Board Unanimously Recommends Stockholders Vote FOR CCM Transaction
- Transaction Value Analysis: The TWO Board unanimously believes that the transaction with CrossCountry, offering $12.00 per share in cash, significantly exceeds UWMC's proposal of $7.58 per share, demonstrating the superior value and certainty of the CCM deal, which prioritizes shareholder interests.
- Shareholder Benefit Assurance: The TWO Board emphasizes that opting for the CCM transaction will provide all common stockholders with a 21% premium and has already secured 35 state regulatory approvals, ensuring a smooth transaction and reducing risks faced by shareholders.
- UWMC Proposal Deficiencies: The TWO Board points out that UWMC's proposal fails to address the core deficiencies and risks previously identified, and its deteriorating financial condition, with Fitch downgrading its outlook twice, indicates significant uncertainty surrounding UWMC's transaction.
- Regulatory Compliance Issues: The TWO Board questions UWMC's claim of closing within 60 days, asserting that it has not provided necessary regulatory approvals and lacks transparency, urging shareholders to scrutinize UWMC's true intentions and capabilities.
See More
Schall Law Firm Investigates Claims for Two Harbors Investors
- Investigation Launched: The Schall Law Firm has announced an investigation into Two Harbors Investment Corp. focusing on potential violations of securities laws, particularly regarding false or misleading statements that could undermine investor confidence.
- Investor Rights Protection: This investigation aims to support shareholders who have suffered losses, encouraging affected investors to participate, indicating that the company faces legal risks that may impact its stock performance.
- Legal Consultation Services: Schall Law Firm offers free consultations to help investors understand their rights, demonstrating a commitment to protecting shareholder interests while potentially attracting more clients to participate in litigation.
- Securities Litigation Expertise: As a firm specializing in securities class actions, the investigation by Schall may trigger broader legal actions, affecting Two Harbors' market reputation and future operations.
See More
UWMC Proposes Superior Acquisition Offer Over CCM
- Cash Acquisition Proposal: UWMC has proposed to acquire Two Harbors at $12.50 per share in cash, which is clearly superior to CCM's offer of $12.00 per share, expected to provide higher returns for shareholders and enhance market competitiveness.
- Shareholder Voting Appeal: UWMC urges Two Harbors shareholders to vote against the CCM merger proposal at the upcoming special meeting, emphasizing that only by voting no can they compel the board to engage in effective negotiations with UWMC to maximize value.
- Transaction Completion Timeline: UWMC states that, barring further obstruction from the Two Harbors board, it anticipates closing the transaction within approximately two months of signing an agreement, showcasing its strong regulatory relationships and market execution capabilities.
- Role as Value Driver: UWMC highlights its critical role in enhancing shareholder value for Two Harbors, noting that without its ongoing acquisition proposals, Two Harbors might have sold for as low as $10.80 per share, underscoring the strategic significance of its offers.
See More
