Hedge fund SRM Global Master Fund LP, which owns a 5.2% stake in Countrywide Financial Corp., believes Bank of America Corp.'s offer to buy the largest U.S. mortgage lender is too low, according to a regulatory filing. It seems some analysts may agree.
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With Bank of America's share price at $43.92 as of 1:45 pm, the planned share swap is valued at about $8 per Countrywide share, or $4.6 billion, but analysts put the book value of Countrywide shares, based on the company's Dec. 31 balance sheet, at about $22 a share.
SRM believes that Countrywide could "rapidly return to profit on a standalone basis," and is seeking information from the bank on whether efforts were made to remain independent, according to the filing. Additionally, SRM may push for an alternative bid.
Assuming the deal closes, BofA announced that Countrywide COO David Sambol will take the helm of the combined bank's mortgage business. - Matthew Wurtzel
See Schedule 13D filing from SEC Edgar
See story from Reuters
See SRM story from the Financial Times
See SRM story from The Wall Street Journal
