TWO Reaffirms Support for CrossCountry Deal Amid UWM Response
TWO, a mortgage servicing rights-focused real estate investment trust (REIT), has reaffirmed the unanimous support of its Board of Directors for the company’s amended all-cash transaction with CrossCountry Mortgage following a revised unsolicited proposal from UWM Holdings Corporation.
The announcement comes after UWMC submitted an updated acquisition proposal on April 30, 2026. After conducting what the company described as a thorough review process with the assistance of independent legal and financial advisors, TWO’s Board concluded that the revised UWMC offer did not qualify as a “Company Superior Proposal” under the terms of the amended merger agreement already signed with CrossCountry Mortgage (CCM).
As a result, the Board unanimously rejected the revised UWMC proposal and reiterated its recommendation that shareholders vote in favor of the amended CrossCountry transaction during the company’s Special Meeting of Stockholders scheduled for May 19, 2026.
According to TWO, the Board remains focused on fulfilling its fiduciary duties and believes the CrossCountry agreement provides greater certainty, lower risk, and superior value for shareholders compared to UWMC’s revised proposal.
The company stated that the Board determined UWMC’s offer was inferior across several important areas, including financing certainty, execution risk, operational stability, and overall credibility. TWO also expressed concerns that UWMC’s proposal ultimately provides lower value to shareholders when all factors are considered.
One of the primary concerns raised by TWO relates to UWMC’s financing structure. Although UWMC claimed to have secured a $1.3 billion bridge financing facility from Mizuho Bank, TWO argued that the financing is not fully committed. According to the company, the financing arrangement remains subject to lender due diligence and gives the lender the ability to decline funding at its sole discretion.
TWO stated that this creates uncertainty around UWMC’s ability to complete the transaction, describing the financing as conditional rather than firmly committed.
The company also pointed to concerns surrounding UWMC’s financial position and balance sheet. TWO noted that Fitch Ratings has downgraded UWMC’s outlook twice in recent months, citing concerns over rising corporate leverage.
According to TWO, Fitch also highlighted that UWMC has experienced an average annual capital drain of approximately $535 million over the past three years, with that shortfall being financed through increased leverage.
TWO further questioned UWMC’s reported cash position. The company stated that UWMC previously disclosed approximately $402 million in cash on hand as of March 31, 2026, but that figure did not account for an estimated $170 million dividend payment made on April 9, 2026.
TWO argued that UWMC’s failure to provide updated cash balance information in subsequent proposals raises concerns about the company’s current liquidity position. Additionally, TWO criticized UWMC’s proposal for lacking customary interim operating covenants that would typically restrict actions such as issuing additional equity or paying further dividends before a transaction closes.
Beyond financial concerns, TWO also questioned the credibility and consistency of UWMC’s public statements regarding the proposed transaction.
The company noted that UWMC had previously characterized TWO’s business as “effectively a melting ice cube” and publicly stated that a merger with TWO would produce “no operational efficiencies” or synergies.
TWO argued that these comments directly contradict UWMC’s earlier claims from December 2025, when the company reportedly projected approximately $150 million in annual synergies from a potential combination.
The Board also referenced prior public statements by UWMC suggesting that an all-cash acquisition of TWO would not make financial sense for UWMC or its shareholders. TWO stated that UWMC is now attempting to position the revised offer as a credible value-creation opportunity despite those earlier remarks.
According to TWO, the revised proposal also fails to provide the strategic rationale originally cited by UWMC for pursuing a transaction, including increasing UWMC’s public float through stock issuance.
TWO additionally criticized UWMC for repeatedly accompanying its acquisition proposals with litigation threats if its terms were not accepted. The company described this behavior as inconsistent with good-faith negotiations and said it further undermines confidence in UWMC’s intentions and ability to complete a transaction successfully.
Employee retention and operational continuity were also identified as major concerns by TWO’s Board.
The company stated that UWMC’s revised proposal removes employee protections that were included in the original merger agreement between the parties. TWO argued that UWMC’s public criticism of the company’s operational value and workforce creates significant risk of employee departures during the transaction process.
According to TWO, a substantial loss of personnel could create serious operational challenges, including difficulties meeting regulatory obligations, SEC reporting requirements, REIT tax compliance standards, and mortgage servicing responsibilities.
The company warned that failure to service mortgage loans in accordance with government-sponsored enterprise (GSE) requirements could potentially result in defaults that allow GSEs to seize TWO’s mortgage servicing rights assets without compensation.
TWO emphasized that such an outcome would have devastating financial consequences for shareholders.
The Board also expressed concern about what would happen if UWMC’s proposed transaction ultimately failed to close after significant employee attrition occurred. In that scenario, TWO stated it could be left operating independently with a weakened workforce and reduced business value.
Another major issue raised by TWO relates to regulatory approvals and transaction timing.
UWMC has claimed that it could complete the acquisition within two to three months after signing an agreement. However, TWO disputed the feasibility of that timeline, noting that state regulatory approvals related to mortgage servicing licenses typically require at least 120 days’ advance notice.
The company argued that UWMC has not provided a credible plan for satisfying these regulatory requirements and suggested that attempting to close without obtaining proper approvals could create serious business and compliance risks.
TWO also criticized the structure and value of UWMC’s stock consideration.
While UWMC has promoted a “headline value” of $12.00 per TWO share, the company noted that the default consideration under UWMC’s proposal would largely consist of UWMC stock, which currently equates to approximately $8.54 per TWO share based on market prices.
According to TWO, many shareholders would not actually receive the full $12.00 value highlighted by UWMC.
The company estimated that approximately 25% to 30% of TWO’s outstanding shares would receive UWMC stock by default, resulting in blended consideration valued between approximately $10.96 and $11.13 per share based on current trading levels.
TWO argued that this compares unfavorably to the certainty of the $11.30 per share all-cash consideration available to every shareholder under the CrossCountry transaction.
The Board further noted that the value of UWMC stock remains uncertain due to the company’s leverage levels, ongoing capital drain, and continued insider selling activity.
TWO highlighted that UWMC’s share price has declined approximately 30% since December 2025, falling from $5.12 to $3.66 per share.
According to TWO, any shareholder interested in owning UWMC stock can purchase shares independently without exposing themselves to the risks and uncertainty associated with the proposed acquisition structure.
Given these concerns, TWO’s Board reiterated its belief that the amended CrossCountry Mortgage transaction represents the best available outcome for shareholders. The company continues to recommend that stockholders vote in favor of the all-cash CCM transaction at the upcoming May 19 special meeting.
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