Key facts
- Two Harbors Investment Corp. has received most required state and agency approvals for its sale to CrossCountry Intermediate Holdco LLC.
- One state's approval remains pending for the transaction.
- The closing date delay necessitates a recalculation of the stub dividend for Two Harbors shareholders.
- The stub dividend will be based on the actual closing date and the number of days in the stub period.
- The stub dividend will not reduce the merger consideration paid to Two Harbors shareholders.
Two Harbors Investment Corp. has announced that it has received the necessary state and agency approvals for its acquisition by CrossCountry Intermediate Holdco LLC, with the exception of one state. This delay in closing the transaction has prompted a revision to the previously estimated stub dividend that will be paid to Two Harbors' common shareholders.
Initially, the companies had projected a stub dividend of $0.12196 per share, based on an anticipated August 3 closing date. However, due to the revised timeline, the stub dividend will now be recalculated. The new formula will equate Two Harbors’ most recent quarterly dividend of $0.34 per share, multiplied by the number of days from the end of the second quarter of 2026 through the day before the merger closes, divided by the 92 days in the third quarter of 2026.
This stub dividend is slated to be paid to shareholders of record on the last trading day immediately preceding the merger's effective time and will be distributed concurrently with the merger consideration. The company emphasized that this dividend will not reduce or impact the merger consideration payable to Two Harbors common stock holders.
The acquisition, first revealed earlier this year, is intended to combine Two Harbors' mortgage asset portfolio with CrossCountry Intermediate Holdco LLC's origination and servicing capabilities. The deal's final price, after a public bidding process that included United Wholesale Mortgage, settled at approximately $1.26 billion. CrossCountry Intermediate Holdco LLC increased its cash bid multiple times, ultimately reaching $12 per share plus a dividend component, representing a 19% premium over Two Harbors' tangible book value at the end of March.
In 2025, CrossCountry Intermediate Holdco LLC was ranked as the seventh-largest overall mortgage lender and the top distributed retail mortgage lender, having originated $51 billion in mortgages. The acquisition is expected to add Two Harbors' $159 billion mortgage-servicing rights portfolio to CrossCountry Intermediate Holdco LLC's existing $202 billion portfolio as of the first quarter. Two Harbors also manages approximately $40 billion in loans through its subsidiary, RoundPoint Mortgage Servicing LLC, acquired in 2023, and operates a small direct-to-consumer origination business launched in 2024.