trending Market Intelligence /marketintelligence/en/news-insights/trending/4skan6zkqfvhjdp2dm4f2g2 content esgSubNav
Log in to other products

 /


Looking for more?

Contact Us
In This List

Nationstar contacted 23 parties before landing deal with WMIH, filing shows

Blog

Banking Essentials Newsletter - April Edition

Blog

Tracking Credit Risk of a Major U.S. Retailer

Blog

Banking Essentials Newsletter: March Edition - Part 2

Blog

A Bank Takes Its Project Finance Assessments to a New Level


Nationstar contacted 23 parties before landing deal with WMIH, filing shows

Nationstar Mortgage Holdings Inc. contacted 23 parties, including KKR & Co. LP, to discuss a potential transaction after it launched a sale process in September 2017. KKR was originally contacted as part of a review of strategic alternatives for Xome Holdings.

Over the next two months, Nationstar's counsel Debevoise & Plimpton LLP negotiated confidentiality agreements with 14 parties, while Nationstar executed confidentiality agreements with nine parties.

Nationstar's board began a strategic review earlier in the spring of 2017, while exploring strategic alternatives for Xome Holdings, over the possibility that its controlling stockholder Fortress may have differing interests from its unaffiliated stockholders in various potential strategic alternatives. The company discontinued exploring a potential sale of Xome Holdings in August 2017 after failing to receive a "sufficiently attractive" proposal.

WMIH Corp. entered the picture on Oct. 30, 2017, when two KKR employees, also WMIH directors, brought the potential transaction to the company's attention. WMIH, which is the direct parent of WM Mortgage Reinsurance Co. Inc., emerged from 2012 bankruptcy as the successor to Washington Mutual Inc.

On Nov. 1, 2017, WMIH proposed to acquire Nationstar in a merger with a cash/stock election, whereby roughly 32% of Nationstar shares would be exchanged for stocks comprised of WMIH common stock with a value of $23.00 per share of Nationstar common stock and roughly 68% of Nationstar shares would be exchanged for cash equal to $16.00 per share of Nationstar common stock. Meanwhile, the maximum other parties offered for each Nationstar common share was $22.00 in cash for 100% of Nationstar.

WMIH's proposal requested that Fortress make an irrevocable election to take 100% of its consideration in cash. Later in December 2017, WMIH made another offer, proposing to pay in cash $18.00 per common share of Nationstar, but no longer requiring Fortress to make a cash election for Nationstar's common stock it held.

However, WMIH's board on Dec. 19, 2017, decided to suspend talks with Nationstar, saying it was unlikely that it could clarify all due diligence matters within Nationstar's proposed timing. When Nationstar in January indicated it would give WMIH more time to complete due diligence, discussions started again.

Once the due diligence was complete and WMIH agreed to increase its stock consideration so that Nationstar stockholders would receive stock representing roughly 36% of fully diluted equity of WMIH post-closing, the merger agreement was signed on Feb. 12, and the deal was announced a day later.