Two board unanimously rejects UWM bid, calls it ‘predatory’

Two Harbors Investment Corp. has unanimously rejected an unsolicited acquisition bid from UWM Holdings Corp. (UWM), which offered $12.50 per share in cash or an alternative of 2.3328 shares of UWM stock. The rejection was based on concerns regarding financing, the valuation of mortgage servicing rights (MSR), and execution risk. This decision comes ahead of a critical vote scheduled for May 19. UWM's bid was an attempt to disrupt a pending merger between Two Harbors and CrossCountry Mortgage (CCM). The offer was raised on a Monday, indicating UWM's aggressive strategy to secure the acquisition and counter the existing merger plans. However, despite the increased cash offer, Two Harbors deemed the proposal as ‘predatory,’ reflecting their stance on the potential implications of accepting such an offer. The rejection highlights the ongoing competition in the mortgage and investment sectors, particularly as companies like UWM seek to expand their market presence through acquisitions. The situation underscores the complexities involved in corporate mergers and acquisitions, especially when multiple parties are vying for control over a single entity. As the May 19 vote approaches, the dynamics between UWM, Two Harbors, and CCM will continue to evolve.