UPDATED, Aug. 11, 2023, 9:09 a.m.: AG Mortgage Investment Trust, a publicly traded affiliate of L.A.-based investment firm Angelo Gordon, has agreed to buy a mortgage specialist for about $103 million.
AG Mortgage will buy Western Asset Mortgage Capital’s 9.2 million outstanding shares for $11.23 each, according to a release on Tuesday, representing a premium of 34 percent compared to the REIT’s stock price close on July 12, when a deal was first announced.
Western Asset Mortgage primarily invests in a range of residential and commercial mortgage-backed securities and loans, according to financial filings. At the end of the first quarter, the firm held about $2.4 billion in assets — $1 billion of which were listed as residential whole loans that were not securitized.
Many of the residential loans on Western Asset Mortgage’s books are non-qualified mortgages, meaning borrowers could use alternative ways to verify their income. Some are fixed-rate and most have an interest rate between 4 and 5 percent, according to the firm’s quarterly report.
AG Mortgage is in a similar line of business.
AG Mortgage beat out a deal from Terra Property Trust, which had bid $15.96 per share.
Western Asset Mortgage “requested additional changes that we were unwilling to make because they would not have been in stockholders’ best interests,” Terra Property Trust said in a statement on Wednesday.
But Terra still might reap the benefits of the deal. Terra Property Trust, based in New York, actually bought a 5.2 percent stake in AG Mortgage Investment Trust last month, solidifying its status as the second-largest stockholder in the company.
The deal marks a busy few months for Angelo Gordon.
In May, private equity giant TPG announced it would acquire Angelo Gordon for $2.7 billion in an effort to boost its credit investing operations.
A previous version of this story incorrectly stated Terra Property Trust had bid about $17 a share.