Two Harbors Investment Corp. Updates on UWM Engagement: No Proposal Submitted
Two Harbors Investment Corp. (NYSE: TWO) has issued a significant press release detailing the outcome of its engagement with UWM Holdings Corporation (NYSE: UWMC) following the expiration of a waiver period intended to facilitate potential transaction discussions. The waiver period, which lasted from June 8 to June 12, 2026, has concluded without any proposal being submitted from UWMC, prompting TWO's Board of Directors to reaffirm its recommendation for stockholders to support the pending transaction with CrossCountry Mortgage, LLC (CCM).
1. Background on the Engagement
The waiver was necessary for TWO to explore UWMC's proposals more closely, as the existing Merger Agreement with CCM included non-solicitation restrictions. With encouragement from stockholders and a recommendation from Institutional Shareholder Services (ISS), TWO sought and obtained a waiver from CCM, granting the company the ability to engage directly with UWMC. This engagement commenced with a letter from TWO's CEO inviting UWMC's CEO for discussions in New York.
During the waiver period, a video call was held on June 11, 2026, where UWMC’s CEO presented several ideas regarding potential modifications to their proposal. However, when pressed for a formal proposal, he indicated uncertainty about whether one would be forthcoming, stating that further diligence on TWO would be required. Ultimately, UWMC did not submit a written proposal by the end of the waiver period.
2. Board's Recommendation for Stockholders
The Board of Directors has taken this opportunity to reiterate its strong recommendation for stockholders to vote FOR the CCM transaction on the WHITE proxy card at the upcoming Special Meeting scheduled for June 23, 2026. The letter emphasized that the Board believes the CCM transaction is in the best interest of all TWO stockholders. The key points made in the Board's communication include:
- Immediate Cash Value: The CCM transaction offers $12.00 per share in cash to all stockholders, along with a pro-rated stub dividend, eliminating any reliance on volatile stock considerations.
- Premium on Share Price: The offer represents a 21% premium to TWO’s unaffected share price prior to the announcement of the UWMC transaction, and a staggering 119% premium to the company’s fully diluted tangible book value as of March 31, 2026.
- Regulatory Approvals: The transaction is backed by binding commitments and has already secured 46 of 53 required regulatory approvals, with an anticipated closing date in August 2026.
3. Concerns Over UWMC's Proposal Structure
The Board has been vocal about its concerns regarding UWMC's proposal structure, particularly the default consideration for non-electing stockholders which would involve receiving UWMC stock. Given the recent decline of UWMC's stock price—falling over 50% since December 2025—TWO's Board has expressed doubt about the viability and fairness of such an arrangement. The Board posits that the all-cash offer from CCM is superior and presents a more reliable option for stockholders.
4. Conclusion and Next Steps
As the deadline for voting approaches, the TWO Board urges stockholders to consider the benefits of the CCM transaction and vote FOR it using the WHITE proxy card. The absence of a meaningful proposal from UWMC during the waiver period has led the Board to conclude that the proposed CCM transaction represents the best value for its stockholders amidst an uncertain market landscape.
TWO remains committed to ensuring that its stockholders receive maximum value and clarity as the situation develops. The upcoming Special Meeting on June 23 will be a pivotal moment for stockholders to make their voices heard regarding the future direction of the company.
