Just when the mortgage industry thought the Two Harbors saga might finally be nearing its finale, another episode dropped Thursday morning.
Two Harbors Investment Corp. announced it is once again postponing its shareholder vote on the proposed sale of the company to an affiliate of CrossCountry Mortgage (CCM), extending this public and increasingly exhausting merger battle into June.
The special meeting, originally scheduled for May 19 and already delayed once to May 28, has now been adjourned again until June 11 “to continue engaging with stockholders and solicit additional proxies” in support of the CrossCountry transaction.
Translation: this thing is still too close to call.
The repeated delays strongly suggest Two Harbors may still not have enough shareholder support locked up to approve the CrossCountry deal while rival bidder UWM continues aggressively lobbying investors to reject it.
Two Harbors’ board reiterated Thursday that it unanimously recommends shareholders vote “FOR” the CrossCountry transaction and said stockholders who have already voted in favor of the deal do not need to take any additional action.
The company said the additional time will allow it to continue shareholder outreach efforts and encourage more investors to participate in the vote. Previously submitted proxies will still count unless they are revoked or changed.
Two Harbors also continued leaning heavily into what has become its core argument throughout the battle: certainty.
The company emphasized that the CrossCountry transaction is fully financed, carries no financing contingency, and is already well advanced through the regulatory approval process. According to the company, the transaction has already received early termination of the HSR waiting period and 41 of the 53 required state and agency approvals have already been obtained.
The deal itself has also become more expensive over time.
CCM originally offered $10.80 per share before raising the bid twice — first to $11.30 and later to $12.00 per share in cash. Two Harbors said the final price represents a 21% premium to the company’s unaffected share price and a 19% premium to fully diluted tangible book value.
Under the agreement, common shareholders would also receive a pro-rated stub dividend for the quarter in which the transaction closes, while holders of preferred shares would receive $25 per share plus accumulated and unpaid dividends.
For anyone who hasn’t been following the mortgage industry’s version of “Succession,” the fight dates back months.
Two Harbors originally agreed to sell itself to UWM in an all-stock transaction before CCM came in with a higher all-cash bid. CCM later raised that offer twice, eventually reaching $12.00 per share.
UWM then fired back earlier this month with a revised proposal valued at $12.50 per share through either cash or stock consideration and launched a very public campaign urging shareholders to vote against the CrossCountry transaction.
The fight has evolved into something much bigger than a normal merger dispute.
It has become a battle over servicing economics, valuation assumptions, shareholder trust, and, increasingly, deal certainty.
That last issue may now be the key dividing line.
Two Harbors used Thursday’s announcement to again attack UWM’s proposal structure, arguing that shareholders who fail to make timely elections under the UWM offer could automatically default into stock consideration worth only about $7.23 per share based on UWMC’s May 27 closing price.
According to Two Harbors, that scenario could potentially affect 25% to 30% of shareholders.
“By contrast, CCM's $12.00 all-cash offer, plus a pro-rated stub dividend, delivers certain and immediate value automatically to all stockholders, with no election required,” the company said in its release.
Two Harbors also pushed back aggressively against UWM’s broader narrative surrounding the bidding process.
The company said its board has engaged with UWM throughout what it described as a lengthy and competitive process involving multiple legal and financial advisors. It also claimed UWM has failed to adequately address concerns surrounding deal structure, financing certainty, regulatory approvals, employee attrition, and business continuity.
“Walking away from a signed, fully financed, regulatory-advanced transaction in favor of UWMC’s non-binding proposal would expose all stockholders to substantial risk with no assurance that equivalent or better terms would re-emerge,” the company said.
Still, Two Harbors left the door slightly open, saying it would consider any “actionable, all-cash, fully financed proposal” from UWM or another party consistent with its fiduciary duties.
The proxy fight escalated significantly earlier this month after proxy advisory firm ISS recommended shareholders vote against the CrossCountry transaction, arguing the Two Harbors board did not fully maximize shareholder value during the sale process.
That recommendation appears to have materially changed the dynamics of the vote and likely contributed to the original May 19 adjournment.
The bigger story here is what this battle says about the current value of mortgage servicing rights.
Two Harbors is heavily tied to MSRs, an increasingly attractive asset in a higher-rate environment where refinance activity remains limited and servicing cash flows last longer.
This entire proxy war is really a fight over who controls one of the industry’s more strategically valuable servicing portfolios heading into the next phase of the mortgage cycle.
For CrossCountry, acquiring Two Harbors would significantly expand its servicing footprint and recurring revenue profile.
CCM responded publicly after the adjournment, reaffirming that its $12.00 per share cash bid — plus the pro-rated stub dividend — is its “best and final offer” for Two Harbors shareholders. CCM said the transaction represents “the highest premium paid for a mortgage-REIT” and warned it “will not pursue a deal at all costs,” adding that the company has other strategic alternatives available.
The statement appeared aimed at increasing pressure on shareholders, weighing whether another adjournment could eventually produce a higher offer.
For UWM, winning the company back would further strengthen its already dominant position across servicing and wholesale lending at a time when scale continues to matter more than ever.
UWM also fired back Thursday, arguing the second adjournment shows shareholders want Two Harbors to engage directly with UWMC rather than move forward with what it called CrossCountry’s “inferior” and now “best and final” offer.
The company said the delay “demonstrates unequivocally that TWO stockholders understand what their Board refuses to acknowledge.”
Now the industry gets at least two more weeks before the next episode airs.
The rescheduled shareholder meeting is set for June 11 at 10 a.m. Eastern Time.
*This article was primarily written by a human author. AI tools were used in a limited capacity for research assistance or light editing.
