Two Harbors Investment Corp. (TWO) announced that its board unanimously rejected UWM Holdings Corp.’s revised unsolicited proposal and reaffirmed its support for the all‑cash transaction with CrossCountry Mortgage. The board cited significant closing, financing, and business risks in UWM’s offer, noting that the proposal lacked committed financing and could harm the company’s operations and shareholder value.
UWM’s revised bid valued Two Harbors at $12.00 per share, but the offer relied on a $1.3 billion bridge facility from Mizuho Bank that is conditional and not fully committed. The board calculated that a default to UWM stock would result in a blended value of approximately $10.96 to $11.13 per share—below the $11.30 per share all‑cash offer from CrossCountry. The board therefore did not view UWM’s proposal as a “Company Superior Proposal” under the amended merger agreement.
The shareholder vote on the CrossCountry transaction is scheduled for May 19, 2026, and the company expects the deal to close in the third quarter of 2026. The board’s decision is a key step in the M&A process and signals its preference for the certainty of a cash transaction over the conditional terms of UWM’s bid.
Two Harbors reported Q1 2026 earnings of $0.34 per share, beating analyst expectations of $0.2912. Revenue, however, missed expectations by $6.51 million, falling short of the anticipated $2.63 million. The company maintained profitability despite the revenue shortfall, indicating effective cost management and operational discipline during a period of market volatility.
Management emphasized the value of the all‑cash offer: “In contrast to all Two stockholders receiving the same, certain all‑cash value via the CCM transaction, the default of receiving UWM stock would be financially detrimental to many Two stockholders.” Ron Leonhardt, founder and CEO of CrossCountry, added, “Our increased bid reflects our continued excitement for this transaction and our strong conviction in the strategic and financial merits of combining CCM and TWO Harbors.”
Investor sentiment has been shaped by the ongoing bidding war. While the market has shown optimism around the potential for a higher bid, the board’s preference for the CrossCountry deal underscores its assessment of risk and value. The decision may temper expectations for a premium offer but reinforces the company’s commitment to a clear, cash‑based transaction that protects shareholder value and supports a smooth closing process.
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