Mr. Cooper Group Inc. (NASDAQ:COOP) said Friday its stockholders approved the company's $9.4 billion all-stock merger with Rocket Companies Inc. (NYSE:RKT), sending both stocks higher. Rocket shares also gained after softer-than-expected U.S. jobs data drove yields lower and lifted hopes for a rate cut.
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Mr. Cooper investors will receive 11 shares of Rocket Class A common stock for each of their own, along with a potential $2 per-share dividend before closing, under the deal.
Rocket, which will add Mr. Cooper's servicing platform to its own, beat Wall Street expectations in the second quarter with adjusted revenue of $1.34 billion versus $1.28 billion consensus. Adjusted earnings came in at 4 cents per share, topping the 3-cent estimate.
Loan originations jumped, with $28.4 billion in net rate locks, up 13% year-over-year, and $29.1 billion in closed loans, up 18%. The company ended the quarter with $9.1 billion in liquidity, including $5.1 billion in cash.
Related: Rocket Companies Stock Blasts Off On Q2 Results: Here Are The Highlights
For the third quarter, Rocket guided revenue of $1.60 billion to $1.75 billion, above the $1.50 billion Street view.
Management said the Redfin acquisition is already boosting conversions and funnel growth. Once the Mr. Cooper deal closes, Rocket's mortgage servicing portfolio will top $2.1 trillion, covering nearly one in six U.S. mortgages.
To support the merger, Rocket launched a $1.25 billion tender offer to repurchase senior notes. Citron Research dismissed "meme stock" labels, calling Rocket "the $AMZN of mortgages" in a $13 trillion sector, while hedge fund manager Dan Loeb praised the tie-up as "a transformative, synergy-rich merger."
COOP, RKT Price Actions: Mr. Cooper shares were up 4.21% at $211.15, and Rocket Companies was up 4.07% at $19.93 on Friday at publication.
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Photo: Mr. Cooper, Shutterstock; Rocket, Courtesy of Rocket Companies
