Read More: Western Asset Mortgage Capital, Terra Property Trust share merger plans
However, AG Mortgage president and CEO T.J. Durkin noted that WMC has seen a 10.1% decline in its share price since announcing its merger plans with TPT on June 28. Meanwhile, MITT said its offer represents an 18.2% premium to WMC’s closing share price as of July 12.
“Combining WMC and MITT, two publicly traded REITs, presents a value-enhancing investment opportunity for WMC’s stockholders, which we believe is superior to the TPT transaction,” Durkin wrote in a letter addressed to the WMC board.
AG Mortgage further outlined how its acquisition proposal offers WMC stakeholders a “substantial upside while eliminating many risks posed by the TPT transaction.” Benefits include:
“We believe combining WMC with MITT would result in a focused, residential mortgage REIT with an optimized capital structure and significant growth potential and value-creating opportunities for the combined company’s stockholders,” Durkin said. “Our complementary core competencies in residential mortgage credit would establish an even more efficient and competitive company. Importantly, our proposal provides closing certainty and does not accelerate WMC’s convertible notes while also benefiting WMC stockholders, particularly given the cash consideration we describe in greater detail below, significant opportunities for cost synergies, and expected earnings accretion following the transaction’s close.”
