Terra Property Trust, Inc. entered into an agreement and plan of merger to acquire Western Asset Mortgage Capital Corporation (NYSE:WMC) for approximately $180 million in a reverse merger transaction on June 27, 2023. Under the terms of the Agreement, WMC will issue to TPT stockholders newly designated shares of WMC Class B common stock as merger consideration, with every TPT share being exchanged on a pro forma basis for 0.785 WMC shares. Upon the closing of the merger, TPT stockholders are expected to own approximately 76% of the combined company?s outstanding common stock, while WMC stockholders are expected to own approximately 24%. As on August 3, 2023, Terra Property Trust submitted an enhanced cash-and-stock proposal to the board of WMC. Upon completion of the Merger, TPT?s Chief Executive Officer, Vikram S. Uppal, will serve as Chief Executive Officer of the combined company. The combined company will be headquartered in New York, New York. The board of directors of the combined company will be increased by two directors, and will consist of six TPT-designated directors and two WMC-designated directors. The combined company will be externally managed by Terra REIT Advisors, LLC, TPT?s current external manager. TPT?s management team will maintain current roles in the combined company. Western Asset Mortgage Capital will pay $3 million and Terra Property Trust will pay $6 million in case on merger termination. TPT is offering WMC stockholders $15.96 per share (including $1.43 per share / $8.75 million in cash).

The transaction has been unanimously approved by each of the Boards of Directors of TPT and WMC. The transaction is subject to the respective approvals by the stockholders of TPT and WMC, the Registration Statement being declared effective by the SEC, the listing on the NYSE of the shares of WMC Class A common stock to be issued upon conversion of the shares of WMC Class B common stock that will be issued in connection with the merger and other customary closing conditions. Transaction projected to be accretive to distributable earnings, with immediate G&A savings. As of July 28, 2023, 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) to acquire WMC is a ?Parent Superior Proposal? within the meaning of WMC?s merger agreement with Terra Property Trust, Inc. WMC has notified TPT that it intends to terminate their merger agreement unless WMC receives a revised proposal from TPT by 11:59 p.m. Eastern Time on August 3, 2023 such that the WMC board of directors determines that MITT?s proposal is no longer a Parent Superior Proposal, after taking into account all aspects of any such proposal WMC may receive from TPT. The transaction is expected to close during the fourth quarter of 2023.

Raymond James is acting as exclusive financial advisor, and Michael Kessler, Justin Howard, Julie Mediamolle, Misbah Mohiuddin, Brittany Raway, Joon Yoo, David Rutherford, David E. Brown, Aaron Hendricson, Paul Hespel, John Schippert, Sarah Ma and Kerry Wenzel of Alston & Bird LLP is acting as legal advisor to TPT. JMP Securities, a Citizens Company is acting as exclusive financial advisor, and Thomas W Greenberg, David J Goldschmidt, Joseph M Penko and Sarah Beth Rizzo of Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to WMC. Latham & Watkins LLP advised JMP Securities, as financial adviser to WMC.

Terra Property Trust, Inc. cancelled the acquisition of Western Asset Mortgage Capital Corporation (NYSE:WMC) in a reverse merger transaction on August 8, 2023.