SRM Fund Management Boosts Stake in Countrywide (CFC), Sends Letter Opposing BoA Merger
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In an amended 13D filing on Countrywide Financial Corp. (NYSE: CFC), SRM Fund Management disclosed a 5.48% stake in the mortgage company, up from the 5.2% stake the firm disclosed a few weeks ago. The firm also continues to believe the merger with Banc of America (NYSE: BAC) undervalues the company. The firm sent a letter to the company against the merger.
In the letter the firm said, "We believe that the merger transaction with Bank of America is not in the best interests of its shareholders. We are extremely concerned that the value to be received by shareholders based upon the proposed terms of the merger represents less than half of the book value of the Company as of the end of the fourth quarter 2007. We also believe that the Company’s acceptance of the proposed terms of the merger and the Board’s approval of those terms are inconsistent with management’s disclosures concerning its financial position and business prospects during the third and fourth quarters of 2007."
The firm also said they are concerned with the significant spike in the volume and price of the Company's shares over the three days preceding the Company's announcement of the merger.
Yesterday, Bill Miller of Legg Mason, a 14.9% Countrywide holder, expressed concerns about the merger and said he will watch the developments.
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