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WMIH Corp.'s announcement that it plans to acquire Nationstar Mortgage Holdings Inc. came a month past the original deadline that WMIH set to repay investors with an acquisition or stock conversion, and a month later than some large investors were willing to wait.
WMIH, the surviving company from the Washington Mutual bankruptcy, on Jan. 5, 2015, issued $600 million in preferred stock to acquire a cash-generating enterprise that could use tax credits generated from $6 billion in net operating losses. The capital raise was contingent on acquiring another franchise within three years or the preferred shares would become redeemable.
In December 2017, WMIH amended the share agreement right before the three-year period passed. A few months later, after a long wait, WMIH on Feb. 13 announced its $1.9 billion merger deal with Nationstar Mortgage.
"In executing the merger agreement with Nationstar, we firmly believe that we have found a target that aligns perfectly with our acquisition strategy and criteria," William Gallagher said during a conference call to discuss the deal. Nationstar's position as the largest nonbank mortgage loan servicer in the...