UWM escalates bidding war for TWO with $12 offer, open letter to shareholders

UWM Holdings Corp. is pressing its campaign to acquire Two Harbors Investment Corp. (TWO), issuing an open letter to the seller shareholders Thursday evening that details a sweetened proposal that valued the real estate investment trust (REIT) at $12 per share, positioning the bid as superior to the pending sale to CrossCountry Intermediate Holdco.

UWM said it has delivered a revised offer that allows Two Harbors investors to elect either $12 in cash per share or 2.3328 shares of UWM Class A common stock, with no cap or proration on the cash election. 

The new cash option is 70 cents per share, or just over 6%, higher than the $11.30 per share cash consideration under Two Harbors’ amended merger agreement with CCM announced on Tuesday.

CCM had to increase its offering from $10.80 after an UWM’s unsolicited proposal on April 20. CCM founder Ron Leonhardt said the firm is “pot committed” to the deal on stage during HousingWire’s The Gathering in Austin on Wednesday. 

UWM also said it increased a committed unsecured bridge facility from Mizuho Bank to $1.3 billion, up from $1.2 billion in its proposal, to support the higher cash component. The bridge financing has “no ratings trigger, no borrowing-base test, and no market contingency,” it says.

The lender urged Two Harbors shareholders to press the REIT’s board to declare the UWM proposal a “superior offer” and to negotiate a merger agreement ahead of Two Harbors’ May 19 special meeting to vote on the CCM transaction.

UWM’s letter is the latest step in a months-long contest for Two Harbors’ mortgage servicing rights (MSR) platform and origination business. 

Two Harbors originally agreed to an all-stock transaction with UWM in December 2025 at the same 2.3328 exchange ratio now back on the table, implying roughly $11.94 per share based on UWM’s stock price at the time, according to the letter. That deal was later terminated when UWM stock fell strongly and Two Harbors pivoted to an all-cash sale to CCM.

“Since that time, UWMC stock has been impacted by short selling, arbitrage activity, global events and, in our view, the actions of your own Board,”the letter states. “The intrinsic value of UWMC, however, has not changed; if anything, it has improved. Our 2026 results have tracked the projections we shared with your Board and your financial advisor in connection with the December agreement, and our most recent quarter, the results of which will be made public next week, was better than our expectations.”

In its letter, UWM accuses Two Harbors’ board of “entrenchment” for increasing deal protections and the termination fee payable to CCM after receiving UWM’s competing offer — from $25.4 million to $50 million — while only requiring CCM to match the $11.30-per-share cash election UWM had proposed.

“They did not negotiate on your behalf with us. Instead, they just had CrossCountry raise the bare minimum to match what is essentially the floor value of our prior offer and then made it harder for UWMC to offer you more value by agreeing to a higher termination fee with CrossCountry,” the letter states. 

UWM also questioned the structure of CCM’s financing. Based on “scant public information,” the letter says, UWM believes CCM is relying on an MSR-backed borrowing base facility whose availability at closing would be subject to collateral-value tests and advance-rate volatility. By contrast, UWM argued, its unsecured bridge facility from Mizuho is not tied to MSR collateral and is fully committed for the entire cash election.

The company said it plans to file a Form 8-K with the Securities and Exchange Commission (SEC) to disclose the full terms of its April 30 proposal and prior April 20 offer, arguing that shareholders “should not have to rely on the Board’s characterization” of its bid.

In a note to clients, analysts at Keefe, Bruyette & Woods framed UWM’s amended proposal as a “pressure on the TWO board,” which likely increases the probability that CCM matches or improves its offer, particularly given the strategic value of TWO’s MSR platform and the fact that CCM has already raised its bid once. 

“While we continue to see this transaction as a positive for UWMC, accretion is likely to be fairly neutral given the interest expense related to the deal if 100% of shareholders chose cash (if we assume a roughly 6% cost of funds),” the analysts said.