Believes HomeStreet's Board Has a Fiduciary Duty to Fully Evaluate Dwight Capital's Offer
DALLAS, May 23, 2019 /PRNewswire/ -- Blue Lion Capital, a Dallas-based investment firm ("Blue Lion") that beneficially owns approximately 6.5% of the stock of HomeStreet, Inc. (HMST) ("HomeStreet" or the "Company"), issued a statement today about the Company's failure to fully engage with Dwight Capital regarding their expressed interest in acquiring HomeStreet's Fannie Mae DUS lending operations and related mortgage servicing rights.
Blue Lion stated:
"We were surprised and disappointed to learn yesterday from a Dwight Capital press release that HomeStreet's Chairman and CEO Mark Mason has apparently misrepresented the interactions that took place between the two firms dating back to 2017. On April 29, 2019, Dwight Capital expressed its interest in acquiring HomeStreet's Fannie Mae DUS lending operations and associated MSRs.
On April 30, HomeStreet stated that it was "not aware of Dwight Capital's interest until their press release, as they had not previously contacted us." The Board of HomeStreet also pledged to review the letter and respond as appropriate.
Now, it appears that HomeStreet's first statement was false and the second a prelude to perfunctory action.
Dwight Capital openly disputed HomeStreet's assertion that the Company was unaware of their interest as members of their management team had sent emails to Mark Mason in 2017 and 2018. Further, Mark Mason responded to the emails.
How can the Chairman of the Board and CEO have received and sent emails and then claimed the Company knew nothing of Dwight Capital's interest? Further, when HomeStreet's press release stated it was "unaware of Dwight Capital's interest," was that the Board speaking or simply a misrepresentation to the Board by its Chairman and CEO?
Blue Lion does not know the people at Dwight Capital and we do not know whether the transaction they would propose would be attractive to HomeStreet. But, we do know that when a public company makes a representation to shareholders, that representation MUST be true.
It also appears that HomeStreet is not intending to substantively consider Dwight Capital's expression of interest. According to their press release, HomeStreet has refused to even have a meeting or perform due diligence.
We continue to be astounded by what we believe to be the inability of HomeStreet's Board to perform its fiduciary duties. Blue Lion expects the Board to fully engage with Dwight Capital and communicate truthfully to shareholders the outcome of the discussions.
Blue Lion has nominated two seasoned financial professionals to the Board of Directors at this year's annual meeting of HomeStreet shareholders and recommends shareholders vote the BLUE proxy card FOR the election of Charles W. Griege and Ronald K. Tanemura and FOR Blue Lion's proposal to separate the roles of Chairman and CEO.
Blue Lion encourages its fellow shareholders to review its proxy materials, investor presentations and shareholder letters, all of which are available at www.FixHMST.com.
Roaring Blue Lion Capital Management, L.P., Blue Lion Opportunity Master Fund, L.P., BLOF II LP, Charles W. Griege, Jr. (collectively, "Blue Lion") and Ronald K. Tanemura (together with Blue Lion, the "Participants") have filed with the Securities and Exchange Commission (the "SEC") a definitive proxy statement and accompanying form of proxy to be used in connection with the solicitation of proxies from shareholders of HomeStreet, Inc. (the "Company"). All shareholders of the Company are advised to read the definitive proxy statement and other documents related to the solicitation of proxies by the Participants, as they contain important information, including additional information related to the Participants. The definitive proxy statement and an accompanying proxy card is being furnished to some or all of the Company's shareholders and is, along with other relevant documents, available at no charge on the SEC website at http://www.sec.gov/ or from the Participants' proxy solicitor, Morrow Sodali, LLC.
Information about the Participants and a description of their direct or indirect interests by security holdings is contained in the definitive proxy statement on Schedule 14A filed by Blue Lion with the SEC on May 16, 2019. This document is available free of charge from the sources indicated above.
Blue Lion Capital Management
Morrow Sodali, LLC
Mike Verrechia / Bill Dooley