TWO delays shareholder vote, presses UWM for all-cash offer

Two Harbors Investment Corp. postponed a special shareholder meeting to vote on its existing agreement to be acquired by CrossCountry Mortgage LLC. The delay will allow Two Harbors to solicit more votes while engaging directly with UWM Holdings Corp. (UWMC) on a potential all-cash acquisition proposal.

The upcoming shareholder vote, originally scheduled for June 11, will now take place on June 23. The subsidiary of CrossCountry Mortgage (CCM) waived its non-solicitation provision through June 12 to enable direct engagement with UWM.

However, the New York-based company continues to recommend that shareholders vote in favor of its existing agreement with CCM for $12 per share in cash, plus a stub dividend. CCM has stated this is its “best and final offer.” Two Harbors noted that the CCM offer is fully financed, with 46 of 53 required state and agency approvals secured and early termination under the Hart-Scott-Rodino Act already granted. The transaction is positioned to close in August 2026.

UWM has offered $12.50 per share in cash, or if a stockholder chooses, 2.3328 shares of UWMC stock. Based on its experience with similar elections, Two Harbors estimates that roughly 25% to 30% of shareholders would fail to complete the necessary paperwork on time and would therefore receive stock instead of cash.

Default stock consideration a non-starter

With UWMC shares closing at $2.59 on June 5, the default stock consideration would be worth about $6.04 per Two Harbors share — less than half of the $12.50 headline figure, the company said.

“TWO believes UWMC is counting on that in order to issue devalued stock at the expense of TWO stockholders,” the board said in a statement. “TWO continues to consider the default stock consideration a non-starter and inconsistent with its fiduciary duties to all stockholders, and has communicated this repeatedly.”

Two Harbors is demanding an all-cash offer from UWM with no stock component, fully committed financing for the entire $12.50 per share in cash (including termination and transaction fees), and definitive documents reflecting those terms.

If UWM cannot meet those conditions, Two Harbors said the company “should step aside” and allow shareholders to vote on the only actionable transaction on the table.

A Keefe, Bruyette & Woods note from Thursday mentioned that “the acquisition of TWO no longer appears compelling if it’s largely for cash” for UWM. “The company has recently sounded more open to a dividend cut, and we believe that once the TWO acquisition is resolved, a dividend cut is probable,” the KBW analysts wrote.

Two Harbors believes UWM’s financial condition has deteriorated since it closed a deal with the company in December 2025. At announcement, that deal was valued at $11.94 per Two Harbors share, but within three months the value dropped below $8.25 per share as UWM’s stock slid to about $3.50. That was roughly 20% below Two Harbors’ book value at the time.

The seller also mentioned UWM’s leverage ratio stood at 3.18x in the first quarter of 2026 (compared to peer levels of 1.0x to 1.5x). Furthermore, Fitch Ratings has twice downgraded UWM’s credit outlook in four months, and credit spreads on UWM’s 6.5% notes due March 2031 and comparable CCM bonds are at 185 basis points.

This article was written by Flávia Furlan Nunes with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.