Mr. Cooper Stock Soars as Rocket Companies Buys Loan Servicer for $9.4B

Shares of Mr. Cooper Group (COOP) jumped nearly 25% in premarket trading Monday on news that mortgage lending giant Rocket Companies (RKT) plans to acquire the loan servicer for $9.4 billion in stock.

Mr. Cooper shareholders would receive 11 shares of Rocket for each share of Mr. Cooper they currently own, valuing Mr. Cooper at about $143.33 per share, a premium of about 35% compared to its volume-weighted average price over the past 30 days through Friday.

The combined entity would have a loan servicing portfolio of over $2.1 trillion, and make up about one in six mortgages in the country, the companies said.

The deal marks Rocket’s second major acquisition this month, as it said it would acquire online real estate platform Redfin (RDFN) for $1.75 billion on March 10.

‘End-to-End Homeownership Experience’

“By combining Mr. Cooper and Rocket, we will form the strongest mortgage company in the industry, offering an end-to-end homeownership experience backed by leading technology and grounded in customer care,” Mr. Cooper CEO Jay Bray said.

The deal is expected to close in the fourth quarter of this year, pending approval from Mr. Cooper shareholders and regulators. Bray would then become CEO of Rocket Mortgage and report to Varun Krishna, who would remain CEO of Rocket Companies.

Mr. Cooper shares surged 23% less than 30 minutes before the opening bell, set to open above their all-time high. Rocket shares were down 5.5%.