Bayview to buy remaining stake in mortgage lender Guild for $1.3 billion

By Arasu Kannagi Basil and Ateev Bhandari

(Reuters) -Investment firm Bayview Asset Management will buy all shares of Guild Holdings that it does not already own for $1.3 billion in cash, taking the mortgage lender private nearly five years after it was listed.

Under the deal announced on Wednesday, Guild shareholders will receive $20 for each share held. That represents a 56% premium to the stock's closing price on May 23, the last trading day before Bayview disclosed its interest in acquiring the California-based company.

Guild shares surged 26% to $19.77. Bayview currently owns 7.3% of the company, according to LSEG data.

The mortgage industry is experiencing a wave of consolidation as companies seek greater scale to combat profitability pressures from still-high interest rates and a challenging loan-growth environment.

"We see the M&A trend continuing as we move further into the year and more and more smaller operators choosing to sell," said Mikhail Goberman, equity research analyst at Citizens.

The deal may inspire industry peers to replicate Guild's "acquire and build in order to eventually sell strategy", Goberman said.

In another large-scale consolidation among top U.S. mortgage servicers earlier this year, Rocket Companies agreed to buy Mr. Cooper Group in a $9.4 billion all-stock deal.

Mortgage servicers such as Guild are also expected to benefit when interest rates eventually decline and refinancing activity picks up.

As a private company, Guild will work in partnership with mortgage servicer Lakeview Loan Servicing, a Bayview affiliate.

The partnership will position Guild for additional mortgage origination opportunities, it said.

Guild's management team will remain unchanged. Its board plans to pay a special cash dividend of up to $0.25 per share prior to the deal's closing — expected in the fourth quarter of 2025.

Morgan Stanley was the financial adviser to Guild, while Goldman Sachs advised Bayview on the deal.

(Reporting by Arasu Kannagi Basil and Ateev Bhandari in Bengaluru; Editing by Shailesh Kuber and Shilpi Majumdar)