Two Harbors sued over UWM merger, SEC disclosure concerns

"The complaint alleges the company failed to disclose in its registration statement the identity of an unnamed financial adviser engaged in December 2024 and early 2025, along with any related fees. It also claims Two Harbors did not specify the services tied to $2.5 million in fees paid to Houlihan Lokey, which allegedly omitted projections and implied valuation assumptions in its fairness analysis of the deal."

"The lawsuit further alleges that Greenberg and four other senior executives exercised stock options and made non-open-market stock purchases on both Dec. 17, the day the transaction was announced, and Dec. 18, before selling shares the following day. It's possible that the timing of the merger agreement and announced proposed transaction may have been influenced by the executives' desire to maximize their profits, the complaint states."

"According to the filing, Two Harbors received two unsolicited acquisition proposals in December 2024 one from UWM and another from Company A. The board in January 2025 deemed the latter offer insufficient after meeting with an undisclosed financial adviser and legal counsel, while UWM increased its offer but was rejected. In February 2025, Two Harbors engaged Houlihan Lokey for assistance. The following month, the company sent UWM a nonbinding term sheet featuring a cash-election merger structure to continue negotiations."

Two Harbors agreed to be acquired by UWM under a $1.3 billion transaction that would create the nation's eighth-largest mortgage servicer. Two Harbors focuses on mortgage servicing rights and services conventional loans through RoundPoint Mortgage Servicing. A complaint alleges failure to disclose an unnamed financial adviser engaged in December 2024 and early 2025 and related fees. The complaint asserts non-disclosure of services tied to $2.5 million paid to Houlihan Lokey and alleges omitted projections and implied valuation assumptions in its fairness analysis. The suit alleges certain executives exercised options and made non-open-market purchases around the announcement, raising conflict and timing concerns. The filing describes multiple acquisition proposals and negotiation steps involving undisclosed advisers.

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