Hedge Fund Holder Says Countrywide Selling Too Cheap (CFC, BAC)

A hedge fund is claiming that Countrywide Financial (NYSE: CFC) is selling itself too cheaply to Bank of America (NYSE: BAC).  SRM GLOBAL FUND GENERAL PARTNER LIMITED has filed a Schedule 13D.  SRM now owns and has a shared voting power of just over 30 million shares, or 5.19% of the common stock.  We would at least note that the "as of date" is January 24, 2008, even though the filing posted on Edgar at 8:33 this morning.

Here are excerpts from the comments from SRM: "…the Reporting Persons are of the view that the Merger Agreement does not provide sufficient value to holders of the Issuer’s Common Stock. The Reporting Persons may initiate discussions with the Issuer and may communicate with the Issuer’s executive management and board of directors, with other holders of the Issuer’s Common Stock, and with B of A from time to time regarding the proposed terms of the Merger Agreement. Depending on various factors…. the Reporting Persons may in the future take such actions with respect to their investment in the Issuer……."

In short, SRM is saying that Countrywide is selling itself too cheaply, and SRM is trying to demand a higher price or will try to influence a vote against the approval of this merger.  SRM probably has a long road in front of them here on this effort as Countrywide was going to be an "at risk" company without this buyout. 

Jon C. Ogg
January 31, 2008