Blue Lion shares update on HomeStreet, says DUS license sale may generate $100M

Blue Lion Capital, which owns approximately 2.0% of the stock of HomeStreet, has issued a letter to shareholders to update them on a recent conversation with HomeStreet Bank and potential strategic alternatives being considered. In the letter it states, “During a recent conversation with Mark Mason and Jim Mitchell (Lead Independent Director), Mark detailed potential options that HMST could pursue to alleviate liquidity, capital and viability concerns. Despite expressing doubt that HMST’s FNMA DUS License and associated MSRs could ever receive an offer of $100M or more, they encouraged Chuck Griege to have interested parties contact the Company. As of this writing, at least one interested buyer has sent a letter of intent to HMST.” Blue Lion says it has also learned that Mark Mason is “aggressively pursuing a capital raise as an alternative to selling the DUS license.” The raise would likely be so dilutive to current shareholders that it could trigger a change of control and possibly a change of control payment to Mark Mason exceeding $5M, it adds. Blue Lion believes “the only responsible and achievable solution for HMST and its shareholders is to maximize the value of the DUS license.”