Fund Criticizes Countrywide Deal

[Omaha Steve]

Source: WSJ

By JAMES R. HAGERTY

A hedge fund with managers based in Monaco says Countrywide Financial Corp. Chief Executive Angelo Mozilo is selling the company he built for a pittance.

The Cayman Islands-registered fund, SRM Global Master Fund LP, disclosed Thursday that it holds a 5.2% stake in Countrywide, valued at about $200 million. SRM's filing with the Securities and Exchange Commission argued that terms of Countrywide's recent agreement to sell itself to Bank of America Corp. "considerably undervalue" Countrywide, the largest U.S. mortgage lender in terms of loan volume.

Based on Bank of America's share price early Thursday afternoon, the planned share swap is valued at about $8 per Countrywide share, or $4.6 billion. Analysts put the book value of Countrywide shares, based on the company's Dec. 31 balance sheet, at about $22 a share, though many believe that value will fall as the company writes down loans and securities and provides for future default losses and legal costs.

Countrywide, which earlier this week reported a loss of $421.9 million for the fourth quarter, could "rapidly return to profit on a standalone basis," SRM said. It is seeking information from the company on what efforts it made to survive as an independent company or "induce alternate bids to maximize value for all shareholders."



Read more: http://online.wsj.com/article/SB120180386890832589.html?mod=googlenews_wsj

[Doctor_J]

1. I thought you meant John Fund, WSJ pundit who slept with his girlfriend's daughter

this is too high-brow for me. If Mozilo wants to sell it, what is the problem?

[Javaman]

2. dealing out the bonus's for the rich...

"Countrywide, which earlier this week reported a loss of $421.9 million for the fourth quarter, could "rapidly return to profit on a standalone basis," SRM said."

[Deny and Shred]

3. Sour grapes from the hedge fund

The hedge fund is probably looking at a big loss on the 5.2% stake. This statement might be directed at their investors. "Hey, it was a smart investment, still worth $22 a share, but the CEO, he's the guy to blame. So, don't lose confidence in us and pull your $$$ out of our fund."

[Supersedeas]

4. and where are the Golden Parachutes