Two Harbors Investment Corp.’s board has formally rejected a revised, higher-priced takeover bid from UWM Holdings Corp., doubling down on its support for a competing, all-cash deal and escalating the public battle for control of the mortgage REIT.
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Two Harbors Rejects UWM’s $12 Per Share Offer, Citing ‘Credibility Risks’
Two Harbors Investment Corp.’s board has formally rejected a revised, higher-priced takeover bid from UWM Holdings Corp., doubling down on its support for a competing, all-cash deal and escalating the public battle for control of the mortgage REIT.
The board of Two Harbors Investment Corp. (NYSE: TWO) rejected UWM Holdings Corp.’s revised $12.00 per share acquisition proposal, reaffirming its unanimous support for an $11.30 all-cash transaction with CrossCountry Mortgage and citing significant “financing, closing, business and credibility risks” associated with the UWM offer.
"The CCM transaction delivers $11.30 per share in certain, immediate, all-cash consideration to every TWO stockholder – automatically, with committed financing, no financing contingency and a clear path to closing," the Two Harbors board said in a statement, contrasting it with what it called uncertainties in the UWM bid.
In response, UWM (NYSE: UWMC) called the board’s arguments "disingenuous," stating its fully financed offer is "clearly superior." The public rejection caused Two Harbors stock to fall as much as 3.9% in premarket trading on May 4, while UWM Holdings shares remained relatively stable.
The decision places the fate of Two Harbors in the hands of its stockholders, who must now weigh a certain $11.30 cash payment against a potentially higher but more complex $12.00 offer from UWM. A shareholder vote scheduled for May 19 will likely decide the outcome of the contentious acquisition battle.
A Battle of Bids and Words
At the heart of the dispute are two competing offers. UWM’s proposal offers $12.00 per share, payable in cash or UWM stock at each shareholder's discretion. The board of Two Harbors countered that the stock option is the default, estimating that 25% to 30% of investors would receive UWM stock it values at approximately $8.54 per share, far below the headline offer.
In contrast, the board champions the $11.30 per share all-cash bid from the privately held CrossCountry Mortgage (CCM), which it unanimously supports. "The CCM transaction delivers $11.30 per share in certain, immediate, all-cash consideration to every TWO stockholder," the board stated, emphasizing its certainty.
Two Harbors’ rejection detailed numerous concerns with the UWM proposal. The board characterized UWM’s financing—a $1.3 billion bridge facility from Mizuho Bank—as conditional and not fully committed. It also pointed to UWM’s financial health, citing Fitch Ratings downgrades to its outlook due to an average annual capital drain of approximately $535 million since 2023.
Credibility Under Scrutiny
The board further questioned UWM’s credibility, noting that UWM had previously described Two Harbors' business as "effectively a melting ice cube," a statement that contradicts the $150 million in annual synergies UWM projected in an earlier proposal from December 2025.
UWM fired back immediately, calling the board’s reasoning "illogical arguments to suggest otherwise." The company defended its financing as a "committed, unsecured $1.3 billion bridge facility" and said that Mizuho had agreed to remove a due diligence condition that the TWO board had raised concerns about. "The actions of the TWO board are egregious and demonstrate it does not deserve TWO stockholder support for an inferior deal," UWM said in a press release.
Analysts suggest the fight may not be over. "While TWO shares are likely to be weak, it’s not clear that this is the last word on the sale of TWO," noted Keefe, Bruyette & Woods analyst Bose George. The final decision now rests with shareholders ahead of the May 19 vote.
This article is for informational purposes only and does not constitute investment advice.
