AG Mortgage Investment Trust Inc. (MITT) and Western Asset Mortgage Capital Corporation (WMC) have decided on a slightly different exchange ratio than first announced in June. The change awaits board approval from both sides.
Each outstanding share of WMC common stock will be converted into the right to receive the following: 1.498 shares of MITT common stock and the per share portion of a cash payment from MITT manager equal to the lesser of $7,000,000 or approximately 9.9% of the aggregate per share merger consideration, as specified in the merger agreement. Any difference between $7,000,000 and such a smaller amount will be used to benefit the combined company post-closing by offsetting reimbursable expenses that would otherwise be payable to MITT manager. Cash will be paid in lieu of fractional shares of MITT common stock that would have been received as a result of the merger.
The final exchange ratio, based on a determination date of Sept. 30, 2023 for calculating MITT’s and WMC’s respective transaction expenses, is slightly lower than the base exchange ratio of 1.50 (using an initial determination date of June 30, 2023) that was set out in the joint proxy statement/prospectus, dated Sept. 29, 2023, that was filed by MITT and WMC with the Securities and Exchange Commission (“SEC”) and previously distributed to the parties’ respective stockholders.
The merger agreement has been approved by both companies’ boards of directors. The completion of the merger is subject to the satisfaction of certain customary conditions, including approval of the common stockholders of both MITT and WMC. The companies currently expect the transaction to close on Nov. 9, 2023.
AG Mortgage Investment Trust, Inc. is a residential mortgage REIT with a focus on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market. AG Mortgage Investment Trust, Inc. is externally managed and advised by AG REIT Management, LLC, an Angelo, Gordon & Co. L.P. subsidiary, an alternative investment firm focusing on credit and real estate strategies.
WMC is a real estate investment trust that invests in, finances, and manages a diverse portfolio of assets consisting of residential whole loans, non-agency RMBS, and to a lesser extent GSE risk transfer securities, commercial loans, non-agency CMBS, Agency RMBS, agency CMBS, and ABS. WMC is externally managed and advised by Western Asset Management Company LLC, an investment advisor registered with the Securities and Exchange Commission and a wholly-owned subsidiary of Franklin Resources, Inc.
