TWOD TWO HARBORS INVESTMENT CORP.

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Executive Summary

Two Harbors Investment Corp. (TWO) postponed its special meeting to June 23, 2026, to allow further engagement with UWM Holdings (UWMC) after challenging UWMC to submit an all-cash offer with no stock component. The TWO board continues to recommend the CCM all-cash offer of $12.00 per share plus a stub dividend, arguing that UWMC's $12.50 headline is misleading because non-electing stockholders would receive UWMC stock worth only $6.04 per share at UWMC's recent all-time low of $2.59. CCM has waived non-solicitation provisions through June 12 to permit direct CEO-to-CEO talks, but the board has not determined any UWMC proposal is superior.

Actionable Insight

Key Facts

• Special meeting postponed from June 8 to June 23, 2026 for further solicitation and engagement with UWMC
• TWO board unanimously recommends voting FOR the CCM transaction on the WHITE proxy card
• CCM offer: $12.00 per share all cash to all stockholders plus pro-rated stub dividend; fully financed; 85% of regulatory approvals secured (46 of 53); HSR early termination obtained; expected close in August 2026
• UWMC proposal: non-binding $12.50 per share but only if stockholders affirmatively elect cash; default consideration is 2.3328 shares of UWMC stock worth $6.04 at UWMC's June 5 close of $2.59 (all-time low)
• TWO estimates 25-30% of stockholders would fail to make timely elections and would receive devalued UWMC stock by default
• UWMC stock down ~50% from $5.12 in December 2025 to $2.59; leverage increased from 2.45x (Q3 2025) to 3.18x (Q1 2026); Fitch downgraded credit outlook twice in four months; 1-year default probability 5.75% (up from 1.2% in Dec 2025)
• CCM has waived non-solicitation provisions through June 12 to allow direct engagement with UWMC on an all-cash proposal
• CCM stated $12.00 plus stub dividend is its best and final offer; if stockholders reject it, CCM may walk away
• Previous UWMC merger agreement signed December 2025 was terminated after UWMC stock deteriorated and ISS recommended against it

Financial Impact

CCM offer values TWO at $12.00 per share all cash plus stub dividend; UWMC's non-binding proposal has headline $12.50 but default stock consideration worth $6.04 per share; UWMC stock at all-time low of $2.59 with 50% decline since December 2025

Risk Factors

• CCM may walk away if stockholders reject its offer, leaving TWO with no actionable deal
• UWMC could still make a credible all-cash offer, creating a bidding dynamic that could delay or disrupt the CCM deal
• If the CCM deal fails and no alternative emerges, TWO stock could fall sharply below book value
• Regulatory approvals for CCM are 85% complete but remaining 7 state/agency approvals could face delays

Market Snapshot

Documents Analyzed

This report is based on 4 SEC documents filed with EDGAR.

US Market Status

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