Deal Announcements: TPG Mortgage Trust to Merge With Cherry Hill

Key takeaways

• Among August’s REIT deal announcements, Cherry Hill Mortgage Investment Corporation agreed on August 9, 2026, to merge with TPG Mortgage Investment Trust, Inc., according to an 8-K filed August 10.
• Each Cherry Hill common share is to receive 0.3063 TPG Mortgage shares plus $0.41 in cash from the buyer and an additional $0.52 in cash from the buyer’s external manager.
• Cherry Hill’s Series A and Series B preferred shares convert one-for-one into new TPG Mortgage preferred series.
• Termination fees are $4.7 million payable by Cherry Hill and $7.99 million payable by TPG Mortgage in specified situations.
• TPG Mortgage’s board will add two Cherry Hill designees.

Deal announcements: the structure

The merger agreement brings together Cherry Hill, its operating partnership, TPG Mortgage, a merger subsidiary called MIT Merger Sub II, LLC, and AG REIT Management LLC, the buyer’s manager. It proceeds in two steps: first the operating partnership merges into Cherry Hill, and then Cherry Hill merges into the merger subsidiary, which survives.

Term	Detail
Agreement date	August 9, 2026
Stock consideration	0.3063 TPG Mortgage shares per Cherry Hill share
Cash from buyer	$0.41 per share
Cash from buyer’s manager	$0.52 per share
Preferred stock	Series A to new Series D; Series B to new Series E
Termination fees	$4.7 million (Cherry Hill); $7.99 million (TPG Mortgage)
Outside date	March 9, 2027, plus 60 days if only regulatory approvals remain

The manager’s cash contribution

The most distinctive term is the $0.52 per share paid by the buyer’s external manager rather than by the REIT itself. In externally managed REITs, the manager earns fees based on the size of the vehicle it manages, so a larger combined company benefits the manager directly. Contributing cash to the purchase price is a way for the manager to share some of that benefit with the selling shareholders and make the offer more attractive without diluting the buyer’s own shareholders further.

Together with the $0.41 from the buyer, Cherry Hill holders receive $0.93 per share in cash plus the stock component. The total value they receive will move with TPG Mortgage’s share price until closing, since the exchange ratio is fixed.

Treatment of preferred holders and employees

Preferred shareholders keep substantially equivalent rights in new preferred series of the combined company, which avoids forcing them to accept a cash payout or a different security. On the equity award side, restricted stock units vest and convert into common stock, performance units vest at maximum performance, and restricted shares fully vest.

Approvals required

Each company’s shareholders must approve the deal by majority vote. Other conditions include regulatory approvals, effectiveness of a Form S-4 registration statement for the new shares, NYSE listing approval for those shares, and no injunctions.

The reverse termination fee owed by TPG Mortgage is larger than the fee owed by Cherry Hill. That structure gives Cherry Hill extra protection if the buyer fails to complete the deal or its board changes course.

Why it matters

Mortgage REITs have been consolidating as smaller players seek scale to spread fixed costs and improve access to financing. This deal is a small-cap example of that trend, and the manager-funded cash component shows how external managers can help bridge valuation gaps in such combinations.

What to watch

Watch for the Form S-4 filing with the joint proxy statement, the shareholder meeting dates for both companies, the movement in TPG Mortgage’s share price relative to the fixed 0.3063 exchange ratio, and the identities of the two Cherry Hill designees joining the combined board.