Friday, 29 August 2014
Last updated 2 hours ago
Feb 1 2008 | 12:28pm ET
SRM Global is throwing down the gauntlet in the battle over the U.S.’s largest mortgage lender.
The activist hedge fund said it would vigorously oppose Bank of America’s proposed acquisition of Countrywide Financial Corp. SRM, run by Jon Wood, owns 5.2% of Countrywide.
Under the terms of the deal, BofA would pay $4 billion for Countrywide, which was badly hurt by subprime mortgage defaults, in a stock transaction. That values Countrywide at less than $8 per share; SRM believes the firm’s book value is more like $20 per share. Countrywide shares were selling for $7.33 in midday trading on the New York Stock Exchange.
“We strongly believe that the terms of the proposed merger with Bank of America are contrary to the interests of the company’s shareholders,” an SRM spokesman said. “SRM considers that the proposed terms considerably undervalue the company.”
Countrywide has a huge portfolio of subprime mortgages, and a spike in mortgage defaults left it with a $704 million loss last year. Its marketing practices in the subprime arena have come under criticism, with the Florida attorney general launching an investigation.
In addition to opposing the acquisition, SRM thinks there may be some funny business going on with Countrywide shares. The hedge fund said it plans to ask the U.S. Securities and Exchange Commission to look into price movements in the company’s shares in the days before the merger was announced on Jan. 11.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...