In August 2023, Western Asset Mortgage Capital Corporation (“WMC”) announced that it was being acquired by AG Mortgage Investment Trust, Inc. (NYSE: MITT), a pure play residential mortgage REIT with a focus on investing in a diversified risk-adjusted portfolio of residential mortgage-related assets in the U.S. mortgage market. MITT is externally managed by AG REIT Management, LLC, an affiliate of Angelo, Gordon & Co., L.P., a diversified credit and real estate platform within TPG. The transaction closed on December 6, 2023 and WMC merged into a wholly owned subsidiary of MITT.
The WMC shares were delisted from the NYSE and are no longer trading.
As a result of the merger, each share of WMC common stock issued and outstanding immediately prior to the effective time of the merger was automatically converted into the following: (i) the right to receive 1.498 shares of MITT common stock; and (ii) $0.92, representing the per share portion of a cash payment from MITT’s Manager equal to approximately $5.7 million in the aggregate or approximately 9.9% of the aggregate per share merger consideration, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the merger agreement. Cash was paid in lieu of fractional shares of MITT common stock that would have been received as a result of the merger.
Please reach out to your broker and/or the Exchange Agent if you have any questions regarding the merger consideration you received.
The merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Code. Assuming that the merger qualifies as a reorganization, United States holders of shares of WMC common stock will generally not recognize gain or loss for United States federal income tax purposes upon the receipt of MITT common stock in exchange for shares of WMC common stock in connection with the merger, except with respect to the cash component of the merger consideration.
Holders of WMC common stock should consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or non-US income and other tax laws) of the merger and the ownership and disposition of shares of MITT common stock.
Holders of WMC common stock are also encouraged to review Form 8937, available here, for the federal income tax treatment of the merger.
If you owned some or all of your WMC shares through a financial institution or broker, those shares have been automatically exchanged for shares of common stock of MITT and the per share portion of a cash payment from MITT’s Manager. Please contact your financial institution or broker directly if you have any questions regarding the merger consideration you received.
If you owned some or all of your WMC shares directly through a book-entry registered position, Equiniti Trust Company, LLC, the exchange agent, has issued and distributed the shares of MITT in book-entry form, referred to as Direct Registration (“DRS”), in lieu of a paper certificate, to an account maintained at Equiniti Trust Company, LLC on your behalf. Equiniti Trust Company, LLC will issue a statement representing your MITT shares along with the cash consideration and a check for fractional shares to the address on record.
Yes, MITT’s completed Form 8937 is available here.
Issuers of corporate securities are required to complete Form 8937 to report organizational actions, including a merger that affects the basis of the securities involved in the organizational action. Stockholders are encouraged to review Form 8937 for the federal income tax treatment of the merger.