UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December
6, 2020
Date of Report (Date of earliest event reported)
ANWORTH MORTGAGE
ASSET CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
001-13709
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52-2059785
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(Commission File Number)
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(IRS Employer Identification No.)
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1299 Ocean Avenue, Second Floor, Santa Monica, California
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90401
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(Address of Principal Executive Offices)
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(Zip Code)
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(310) 255-4493
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
x
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which
registered
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Common Stock, $0.01 Par Value
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ANH
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New York Stock Exchange
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Series A Cumulative Preferred Stock, $0.01 Par Value
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ANHPRA
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New York Stock Exchange
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Series B Cumulative Convertible Preferred Stock, $0.01 Par Value
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ANHPRB
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New York Stock Exchange
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Series C Cumulative Redeemable Preferred Stock, $0.01 Par Value
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ANHPRC
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act or Rule 12b-2 of the Exchange Act.
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Emerging growth company
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¨
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ¨
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Item
7.01
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Regulation
FD Disclosure.
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On
December 6, 2020, Anworth Mortgage Asset Corporation, a Maryland corporation (“Anworth”), Ready Capital Corporation,
a Maryland corporation (“Ready Capital”), and RC Merger Subsidiary, LLC, a Delaware limited liability company and
a wholly owned subsidiary of Ready Capital (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger
Agreement”), pursuant to which, subject to the terms and conditions therein, Anworth will be merged with and into Merger
Sub, with Merger Sub continuing as the surviving company (the “Merger”).
On
December 7, 2020, Ready Capital and Anworth issued a joint press release announcing the execution of the Merger Agreement.
A copy of the joint press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
The
information in this Item 7.01 of Form 8-K (including Exhibit 99.1) shall not be deemed to be “filed” for
the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except
as shall be expressly set forth by specific reference in such filing.
Item
7.01 above is incorporated by reference in this Item 8.01.
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Item 9.01
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Financial Statements and
Exhibits.
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Exhibit 104
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Cover Page Interactive Data File (embedded within
the Inline XBRL document)
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Important
Additional Information and Where to Find It
In
connection with the proposed Merger, Ready Capital will file with the U.S. Securities and Exchange Commission (the “SEC”)
a registration statement on Form S-4 that will include a prospectus of Ready Capital and a joint proxy statement of Anworth
and Ready Capital. Anworth and Ready Capital also expect to file with the SEC other documents regarding the Merger. The Merger
will be submitted to the stockholders of Anworth and Ready Capital for their consideration. The definitive joint proxy statement/prospectus
will be sent to the stockholders of Anworth and Ready Capital, and will contain important information regarding the proposed Merger
and related matters. This Current Report on Form 8-K is not a substitute for the registration statement and joint proxy statement/prospectus
that will be filed with the SEC or any other documents that Anworth or Ready Capital may file with the SEC or send to their respective
stockholders in connection with the Merger. STOCKHOLDERS OF ANWORTH AND READY CAPITAL ARE ADVISED TO READ THE REGISTRATION STATEMENT
AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN THEY BECOME AVAILABLE (INCLUDING ALL OTHER RELEVANT DOCUMENTS
THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS AND SUPPLEMENTS TO THESE DOCUMENTS) CAREFULLY AND IN THEIR
ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ANWORTH, READY CAPITAL, THE PROPOSED MERGER, AND RELATED MATTERS.
Stockholders of Anworth and Ready Capital may obtain free copies of the registration statement, the joint proxy statement/prospectus,
and all other documents filed or that will be filed with the SEC by Anworth or Ready Capital (when they become available) at the
SEC’s website at http://www.sec.gov. Copies of documents filed with the SEC by Anworth are will be made available free of
charge on Anworth’s website at http://www.anworth.com, or by directing a request to its Investor Relations, Attention: John
T. Hillman at (310) 255-4438; email: jhillman@anworth.com. Copies of documents filed with the SEC by Ready Capital will be made
available free of charge on Ready Capital’s website at http://www.readycapital.com, or by directing a request to its Investor
Relations at (212) 257-4666; email: InvestorRelations@readycapital.com.
This
communication is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities
shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Participants
in the Solicitation Relating to the Merger
Anworth,
Ready Capital, and their respective directors and executive officers, and certain other affiliates of Anworth or Ready Capital
may be deemed to be “participants” in the solicitation of proxies from the stockholders of Anworth and Ready Capital
in connection with the proposed Merger. Information regarding Anworth and its directors and executive officers and their ownership
of common stock of Anworth can be found in Anworth’s annual report on Form 10-K for the fiscal year ended December 31,
2019 and in its definitive proxy statement relating to its 2020 annual meeting of stockholders filed with the SEC on March 16,
2020. Information regarding Ready Capital and its directors and executive officers and their ownership of common stock of Ready
Capital can be found in Ready Capital’s annual report on Form 10-K for the fiscal year ended December 31, 2019
and in its definitive proxy statement relating to its 2020 annual meeting of stockholders filed with the SEC on May 14, 2020.
Additional information regarding the interests of such participants in the Merger will be included in the joint proxy statement/prospectus
and other relevant documents relating to the proposed Merger when they are filed with the SEC. Free copies of these documents
may be obtained from the sources described above.
Forward-Looking
Statements
This
Current Report on Form 8-K includes “forward-looking statements,” as such term is defined in Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended
to be covered by the safe harbor provided by the same. These forward-looking statements are based on current assumptions, expectations
and beliefs of Anworth and Ready Capital and are subject to a number of trends and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements. Neither Anworth nor Ready Capital can give any assurance
that these forward-looking statements will be accurate. These forward-looking statements generally can be identified by phrases
such as “will,” “expects,” “anticipates,” “foresees,” “forecasts,”
“estimates” or other words or phrases of similar import. Similarly, statements herein that describe certain plans,
expectations, goals, projections and statements about the proposed Merger, including its financial and operational impact, the
benefits of the Merger, the expected timing of completion of the Merger, and other statements of management’s beliefs, intentions
or goals also are forward-looking statements. It is uncertain whether any of the events anticipated by the forward-looking statements
will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition
of the combined companies. There are a number of risks and uncertainties, many of which are beyond the parties’ control,
that could cause actual results to differ materially from the forward-looking statements included herein, including, but not limited
to, the risk that the Merger will not be consummated within the expected time period or at all; the occurrence of any event, change
or other circumstances that could give rise to the termination of the Merger Agreement; the possibility that stockholders of Anworth
may not approve the Merger Agreement; the possibility that stockholders of Ready Capital may not approve the issuance of Ready
Capital common stock in connection with the Merger; the risk that the parties may not be able to satisfy the conditions to the
Merger in a timely manner or at all; risks related to disruption of management’s attention from ongoing business operations
due to the proposed Merger; the risk that any announcements relating to the Merger could have adverse effects on the market price
of common stock of Anworth or Ready Capital; the risk that the Merger and its announcement could have an adverse effect on the
operating results and businesses of Anworth and Ready Capital generally; the outcome of any legal proceedings relating to the
Merger; the ability to successfully integrate the businesses following the Merger; the ability to retain key personnel; the impact
of the COVID-19 pandemic on the business and operations, financial condition, results of operations, and liquidity and capital
resources of Anworth or Ready Capital; conditions in the market for mortgage-related investments; changes in interest rates; changes
in the yield curve; changes in prepayment rates; the availability and terms of financing; market conditions; general economic
conditions; and legislative and regulatory changes that could adversely affect the business of Anworth or Ready Capital. All such
factors are difficult to predict, including those risks set forth in Anworth’ annual reports on Form 10-K, quarterly
reports on Form 10-Q, and current reports on Form 8-K that are available on its website at http://www.anworth.com and
on the SEC’s website at http://www.sec.gov, and those risks set forth in Ready Capital’s annual reports on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K that are available on Ready Capital’s website
at http://www.readycapital.com and on the SEC’s website at http://www.sec.gov. The forward-looking statements included in
this Current Report on Form 8-K are made only as of the date hereof. Readers are cautioned not to place undue reliance on
these forward-looking statements that speak only as of the date hereof. Neither Anworth nor Ready Capital undertakes any obligation
to update these forward-looking statements to reflect subsequent events or circumstances, except as required by applicable law.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
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ANWORTH MORTGAGE ASSET CORPORATION
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Date: December 7, 2020
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By:
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/s/ Joseph E. McAdams
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Chief Executive Officer and President
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Exhibit 99.1
READY CAPITAL AND ANWORTH MORTGAGE ASSET
CORPORATION ANNOUNCE MERGER TRANSACTION
- Transaction
Will Create a Scaled Commercial Mortgage REIT with a Combined Capital Base in Excess of
$1 Billion and a Diversified Investment
Portfolio -
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Substantially Improved Operating Leverage Due to Increased Scale -
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Investment Portfolio Redeployment to Drive Long-Term Earnings Accretion
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New York, NY, & Santa Monica,
CA, December 7, 2020 /PRNewswire/ – Ready Capital Corporation (NYSE:RC) (“Ready Capital”), a multi-strategy
real estate finance company that originates, acquires, finances and services small- to medium-sized balance commercial loans, and
Anworth Mortgage Asset Corporation (NYSE:ANH) (“Anworth”), a specialty finance REIT that focuses primarily on investments
in residential mortgage-backed securities, announced today that they have entered into a definitive merger agreement pursuant to
which Ready Capital will combine with Anworth. The combined company is expected to have a pro forma equity capital base in excess
of $1 billion. The combination is expected to enhance shareholder liquidity and provide for increased operating leverage across
the larger equity base.
Under the terms of the merger agreement,
each share of Anworth common stock will be converted into 0.1688 shares of Ready Capital common stock and $0.61 of cash consideration.
Based on Ready Capital’s closing stock price on Friday, December 4, 2020, the implied offer price is $2.94 per share.
Upon the closing of the merger, Ready Capital stockholders are expected to own approximately 76% of the combined company’s
stock, while Anworth stockholders are expected to own approximately 24% of the combined company’s stock. Ready Capital will
also assume Anworth’s three outstanding series of preferred stock.
In connection with the merger, Waterfall
Asset Management, LLC (“Waterfall”), Ready Capital’s external manager, has agreed to reduce the base management
fee it charges Ready Capital by an aggregate of $4 million over the four quarters immediately following the closing of the transaction.
Based on the closing prices of Ready Capital’s
common stock on December 4, 2020, the market capitalization of the combined company would be approximately $984 million. The
combined company will operate under the name Ready Capital and its shares are expected to continue trading on the New York Stock
Exchange under the existing ticker symbol “RC”.
“This merger highlights our continued
focus on establishing Ready Capital as an industry-leading mortgage REIT, with the scale and financial resources to pursue compelling
risk-adjusted returns across its diversified investment platform,” stated Ready Capital Chairman and Chief Executive Officer
Thomas Capasse. “The combined company will be in a more formidable position to execute its business plan, improve operating
and cost efficiencies, and continue growth in a prudent and profitable manner.”
Anticipated Benefits to Ready Capital
and Anworth Stockholders from the Merger
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·
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Over $1 billion combined capital base and a diversified investment
portfolio
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·
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Portfolio redeployment will enable Ready Capital to capitalize on
attractive investment opportunities
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Scale advantages include:
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§
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Reduced operating expenses (as a percentage of combined capital base)
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Improved access to financing, including corporate debt funding alternatives
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Greater portfolio diversification
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§
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Enhanced shareholder liquidity and investor base diversity
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Management, Governance and Corporate
Headquarters
Upon completion of the merger, Ready Capital’s
Chairman and Chief Executive Officer Thomas Capasse will lead the company and Ready Capital executives Jack Ross, Thomas Buttacavoli,
Andrew Ahlborn and Gary Taylor will remain in their current roles. The combined company will be headquartered in New York, New
York. The Board of the combined company is expected to have eight directors, consisting of Ready Capital’s existing seven
directors and one independent director from Anworth’s current Board.
Timing and Approvals
The transaction has been unanimously approved
by each of the Boards of Directors of Ready Capital and Anworth. The transaction is expected to close by the end of the first quarter
of 2021, subject to the respective approvals by the stockholders of Anworth and Ready Capital and other customary closing conditions.
Advisors
Wells Fargo Securities is acting as exclusive
financial advisor and Alston & Bird LLP is acting as legal advisor to Ready Capital. Credit Suisse is acting as exclusive
financial advisor and Greenberg Traurig LLP is acting as legal advisor to the Board of Directors of Anworth.
Additional Information about the Merger
In connection with the proposed merger,
Ready Capital expects to file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4,
containing a joint proxy statement/prospectus, and other documents with respect to the proposed merger. The joint proxy/prospectus
will contain important information about the proposed transaction and related matters. STOCKHOLDERS OF READY CAPITAL AND ANWORTH
ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER RELEVANT DOCUMENTS FILED BY READY CAPITAL AND ANWORTH WITH THE SEC CAREFULLY IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT READY CAPITAL, ANWORTH AND THE PROPOSED MERGER.
Stockholders of Ready Capital and Anworth
may obtain free copies of the registration statement, the joint proxy statement/prospectus and other relevant documents filed
by Ready Capital or Anworth with the SEC (if and when they become available) through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed by Ready Capital with the SEC are also available free of charge on Ready Capital’s website
at www.readycapital.com. Copies of the documents filed by Anworth with the SEC are also available free of charge on Anworth’s
website at www.anworth.com.
This communication shall not constitute
an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10
of the U.S. Securities Act of 1933, as amended.
Participants in Solicitation Relating to the Merger
Ready Capital, Anworth and their respective
directors and executive officers, and certain other affiliates of Ready Capital and Anworth may be deemed to be participants in
the solicitation of proxies from the stockholders of Ready Capital and Anworth in respect of the proposed merger. Information regarding
Ready Capital’s directors and executive officers can be found in Ready Capital’s definitive proxy statement filed with
the SEC on May 14, 2020 and Ready Capital’s most recent Annual Report filed on Form 10-K for the fiscal year ended
December 31, 2019. Information regarding Anworth’s directors and executive officers can be found in Anworth’s
definitive proxy statement filed with the SEC on March 16, 2020 and Anworth’s most recent Annual Report filed on Form 10-K
for the fiscal year ended December 31, 2019. Additional information regarding the interests of such potential participants
will be included in the joint proxy statement/prospectus and other relevant documents filed with the SEC in connection with the
proposed merger if and when they become available. These documents are available free of charge on the SEC’s website and
from Ready Capital or Anworth, as applicable, using the sources indicated above.
Forward-Looking Statements
This press release contains statements
that constitute “forward-looking statements,” as such term is defined in Section 27A of the Securities Act and
Section 21E of the Exchange Act and such statements are intended to be covered by the safe harbor provided by the same. These
statements are based on current expectations and beliefs of Ready Capital and Anworth and are subject to a number of trends and
uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; neither
Ready Capital nor Anworth can give any assurance that its expectations will be attained.
Factors that could cause actual results
to differ materially from expectations include, but are not limited to, the risk that the merger will not be consummated within
the expected time period or at all; the occurrence of any event, change or other circumstances that could give rise to the termination
of the merger agreement; the inability to obtain stockholder approvals relating to the merger and issuance of shares in connection
therewith or the failure to satisfy the other conditions to completion of the merger; risks related to disruption of management
attention from the ongoing business operations due to the proposed merger; the effect of the announcement of the proposed merger
on Ready Capital’s and Anworth’s operating results and businesses generally; the outcome of any legal proceedings
relating to the merger; the ability to retain key personnel; availability of suitable investment opportunities; changes in interest
rates; changes in the yield curve; changes in prepayment rates; the availability and terms of financing; general economic conditions;
market conditions; conditions in the market for small balance commercial loans and other investments; legislative and regulatory
changes that could adversely affect the businesses of Ready Capital and Anworth; and other factors, including those set forth
in the Risk Factors section of Ready Capital’s and Anworth’s most recent Annual Reports on Form 10- K and other
reports filed by Ready Capital and Anworth with the SEC, copies of which are available on the SEC's website, www.sec.gov.
Neither Ready Capital nor Anworth undertakes any obligation to update these statements for revisions or changes after the date
of this press release, except as required by law.
About Anworth Mortgage Asset Corporation
Anworth Mortgage Asset Corporation (NYSE:
ANH), a Maryland corporation, is a specialty finance mortgage company organized to qualify as a real estate investment trust (“REIT”)
that invests primarily in mortgage-backed securities that are either rated “investment grade” or are guaranteed by
federally sponsored enterprises, such as Fannie Mae or Freddie Mac. Anworth seeks to generate income for distribution primarily
based on the difference between the yield on their mortgage assets and the cost of their borrowings. Anworth Mortgage Asset Corporation
is headquartered in Santa Monica, California, and is externally managed and advised by Anworth Management LLC.
About Ready Capital Corporation
Ready Capital Corporation (NYSE: RC) is
a multi-strategy real estate finance company that originates, acquires, finances and services small- to medium-sized balance commercial
loans. Ready Capital specializes in loans backed by commercial real estate, including agency multifamily, investor and bridge as
well as SBA 7(a) business loans. Headquartered in New York, New York, Ready Capital employs over 400 lending professionals
nationwide. The company is externally managed and advised by Waterfall Asset Management, LLC.
Contact
Ready Capital
Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com
Anworth
Investor Relations
Anworth Mortgage Asset Corporation
Attn: John T. Hillman
(310) 255-4438
jhillman@anworth.com
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