UWM Holdings said Institutional Shareholder Services recommended that Two Harbors Investment stockholders vote against the proposed CrossCountry Mortgage merger at the May 19 special meeting, backing UWM’s competing offer as the higher-value alternative.
ISS said Two Harbors’ board “has not capitalized on the competing bids from uwmc,” and added that the board had entered into “two agreements with ccm over the past six weeks that were subsequently displaced by better offers,” before signing a third agreement that matched UWM’s bid. ISS also said it was “difficult to identify convincing evidence” that the CrossCountry transaction was full value or that the board tried to extract the best terms.
UWM’s offer is valued at $12.50 per share or stock upside, compared with the $12.00 per share CrossCountry merger proposal. UWM said ISS’s report supports its view that rejecting the CrossCountry deal is the best way to preserve value and optionality for Two Harbors stockholders.
ISS also recommended against the non-binding compensation advisory proposal, citing concerns about accelerated equity vesting, and against the adjournment proposal.
UWM said its competing bid has already pushed the process higher, with ISS noting that UWM’s presence “has been the catalyst for two improvements to the offer terms.” The market has reacted to these announcements by moving the company's shares -2.85% to a price of $3.235. Check out the company's full 8-K submission here.
