AG Mortgage Investment Trust, Inc. (NYSE:MITT) submit a non binding proposal to acquire Western Asset Mortgage Capital Corporation (NYSE:WMC) from shareholders for $53.2 million on July 13, 2023. AG Mortgage Investment Trust, Inc. (NYSE:MITT) entered into a definitive merger agreement to acquire Western Asset Mortgage Capital Corporation (NYSE:WMC) from shareholders on August 8, 2023. The offer consists of a fixed exchange ratio (subject to adjustment based on certain transaction expenses of the parties, as described in the press release), representing an implied price of $9.88 per share, consisting of a common stock consideration of $8.90 per share and cash consideration of $0.98 per share as of July 12, 2023. The offer represents an 18.2% premium to WMC?s closing share price, all based on MITT and WMC stock prices as of July 12, 2023. MITT has approval from both of its board of directors and external manager Angelo, Gordon & Co., L.P. to make this proposal. MITT's proposal, reflecting an implied price of $9.88 per WMC share, is financially superior to the TPT deal because (1) it represents as 18.2% premium to WMC's closing price of $8.36 as of July 12, 2023 based on MITT's observable stock price, and (2) WMC shareholders will receive $0.98 per share of cash consideration whereas the TPT deal involves no cash. MTT's proposal is expected to be substantially accretive to earnings in the first year after closing. Upon completion of the merger, MITT?s President and Chief Executive Officer, T.J. Durkin, will serve as Chief Executive Officer of the combined company, which will continue to operate as ?AG Mortgage Investment Trust, Inc.? and be managed by AG REIT Management, LLC, an affiliate of Angelo Gordon. MITT?s Board of Directors will be increased from six to eight directors to include two WMC-designated directors. The combined company will be headquartered in New York and will continue to trade on the NYSE under MITT?s current ticker symbol. As of July 18, 2023, Western Asset Mortgage Capital Corporation announced that WMC?s board of directors has determined in good faith, after consultation with its financial advisors and outside legal counsel, that the unsolicited proposal from AG Mortgage Investment Trust, Inc. (NYSE: MITT)(?MITT?) to acquire WMC is reasonably expected to lead to a ?Parent Superior Proposal? within the meaning of WMC?s merger agreement with Terra Property Trust, Inc. As a result of the WMC board?s determination, WMC intends to engage in discussions with MITT regarding its proposal, in accordance with the terms of the merger agreement with TPT. As per final exchange ratio announced on October 19, 2023, each outstanding share of WMC common stock will be converted into the right to receive the following (i) 1.498 shares of MITT common stock; and (ii) the per share portion of a cash payment from MITT Manager equal to the lesser of $7,000,000 or approximately 9.9% of the aggregate Per Share Merger Consideration. In the event of a termination of the Merger Agreement under certain circumstances, including a change of recommendation or the acceptance of a superior proposal, MITT or WMC, as applicable, would be required to pay the other party a termination fee of, in the case of payment by WMC, $3,000,000 and, in the case of payment by MITT, $6,000,000.

The transaction has been unanimously approved by the Boards of Directors of MITT and WMC and external managers of MITT and WMC. The transaction is expected to close in the fourth quarter of 2023, subject to the respective approvals by the stockholders of MITT and WMC, The Registration Statement shall have been declared effective by the SEC, The shares issued in the Merger shall have been approved for listing on the NYSE and other customary closing conditions set forth in the merger agreement. The Registration Statement was declared effective by the Securities and Exchange Commission (the 'SEC') on September 29, 2023. The companies currently expect the transaction to close on November 9, 2023. As on November 7, 2023, MITT shareholders approved the transaction and the merger is expected to close in the fourth quarter 2023. As of December 5, 2023, WMC stockholders approved the transaction. The Merger is expected to close on December 6, 2023, subject to the satisfaction of the remaining customary closing conditions.

Piper Sandler & Co. is acting as exclusive financial advisor and fairness opinion provider and James A. Kennedy, II and Robert K. Smith of Hunton Andrews Kurth LLP is acting as legal counsel to MITT. MITT has agreed to pay Piper Sandler for its financial advisory services in connection with the Merger a fee of $1 million. MITT paid Piper Sandler (i) $400,000 in connection with a fairness opinion that Piper Sandler rendered on July 27, 2023 relating to the initial exchange ratio of 1.468 proposed by MITT in connection with its July 27, 2023 proposal, and (ii) $100,000 upon rendering its fairness opinion on August 3, 2023, which opinion fees will be credited in full towards the financial advisory fee which will become due and payable to Piper Sandler upon consummation of the merger. BTIG, LLC and JMP Securities LLC, a Citizens Company, are acting as financial advisors, and Thomas W. Greenberg, David J. Goldschmidt, Joe Penko and Sarah Beth Rizzo of Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to WMC. WMC has agreed to pay BTIG a fee of $0.5 million for its services. MITT has engaged Innisfree M&A Incorporated as proxy solicitor for a fee of approximately $50,000. WMC has engaged Morrow Sodali, LLC as proxy solicitor for a fee of approximately $20,000. Equiniti Trust Company, LLC is the transfer agent for MITT Common Stock. O. Keith Hallam III and Sanjay Murti of Cravath, Swaine & Moore LLP acted as legal advisors to MITT. Hogan Lovells US LLP acted as legal advisor to MITT.

AG Mortgage Investment Trust, Inc. (NYSE:MITT) completed the acquisition of Western Asset Mortgage Capital Corporation (NYSE:WMC) from shareholders on December 6, 2023. Cash was paid in lieu of fractional shares of MITT common stock that would have been received as a result of the merger. In connection with the closing of the merger, the size of MITT?s board of directors was increased by two members, and M. Christian Mitchell and Lisa G. Quateman, former WMC board members, were appointed to MITT?s board of directors as independent directors.