Levi & Korsinsky, LLP has commenced an investigation into the fairness of the sale of CYS Investments, Inc. (NYSE: CYS) to Two Harbors Investment Corp. (NYSE: TWO). Under the terms of the transaction, CYS shareholders will receive a certain number of shares of Two Harbors for each share of CYS stock they own; the exchange ratio will be determined by dividing 96.75% of the CYS adjusted book value per share by 94.20% of the Two Harbors adjusted book value per share. Based on the adjusted book value of CYS and Two Harbors as of March 31, 2018, this represents a value of approximately 0.4872 shares of Two Harbors for each share of CYS stock, or the equivalent of $7.79 per share.
The investigation concerns whether the Board of CYS breached their fiduciary duties to stockholders by failing to adequately shop the Company before agreeing to enter into this transaction, and whether Two Harbors Investment Corp. is underpaying for CYS shares, thus unlawfully harming CYS shareholders.
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