Read more: Western Asset Mortgage Capital and Terra Property Trust Share Merger Plans However, AG Mortgage Chairman and CEO TJ Durkin noted that WMC has seen a 10.1% drop in its share price since it announced plans to merge with TPT on June 28. He said his offer represented an 18.2% premium to WMC’s closing share price as of July 12. Dworkin wrote in a letter to the WMC board of directors. AG Mortgage also explained how the acquisition proposal offers WMC stakeholders “significant upside while eliminating many of the risks posed by a TPT transaction.” Benefits include: MITT shares trade on the NYSE at a notable value, while TPT shares are unlisted and have not been valued by public markets through the stock listing. There is no selling pressure after the close, since MITT stockholders already have liquidity. WMC and MITT are very complementary businesses, eliminating the need to change strategy and creating significant business and cost synergies. WMC shareholders will receive a portion of the transaction consideration in cash. The MITT proposal provides speed and certainty for closure. MITT’s proposal avoids accelerating the payment of WMC’s convertible debt. MITT has strong backing from outside director Angelo Gordon, a leading alternative investment firm with $73 billion in assets under management. “We believe the combination of WMC and MITT will result in a concentrated, residential mortgage REIT with an improved capital structure, significant growth potential, and value creation opportunities for shareholders of the combined company,” Dworkin said. “Our complementary core competencies in residential real estate credit will create a more efficient and competitive company. Importantly, our proposal provides the ultimate certainty and no haste of WMC convertible notes while also benefiting WMC shareholders, particularly given the monetary considerations we describe in more detail below,” and significant opportunities for cost synergies, and expected profit accretion after the deal closes.”
