Two Harbors dips after announcing acquisition by CrossCountry Mortgage, ending UWM deal

Two Harbors Investment's TWO.N shares down 1.8% at $11.20 premarket after accepting improved buyout bid from CrossCountry Mortgage (CCM), ending its previous merger agreement with UWM Holdings UWMC.N

CCM agrees to acquire mortgage-servicing-rights-focused REIT for $10.80/sh in cash, compared with its prior bid of $10.70/sh, and to pay $25.4 mln termination fee TWO owes UWMC for terminating that deal

Under the agreement, holders of TWO's preferred stock to have their shares redeemed following closing of the transaction at $25/sh, plus any accumulated and unpaid dividends

Deal expected to close second half of the year

In Dec, TWO and mortgage lender UWMC had agreed to an all-stock merger worth $1.3 bln at the time

Earlier this week, TWO determined CCM's $10.70 bid was superior to its deal with UWMC, and said it also received an all-cash $10.75/sh offer from an additional third party. TWO said Mon that UWMC had proposed revised terms and the two firms were in discussions

UWMC shares up 0.3% at $3.54 before the bell