Even if there is not an ownership change on July 31st, I think it is still possible for a S4V to happen. I just don't think it will be happening simultaneously with the merger, is all I'm saying.
However, upon the release of WMI's safe harbored assets, and once their restricted cash proceeds from the last 10 years are distributed to the rightful recipients, I believe it would be possible for any remaining illiquid assets to be purchased from escrow owners with shares (or more specifically, the escrow holders percentage of ownership interests in the illiquid assets to be purchased with shares). I would imagine such an offer to be made in a similar fashion as with NSM - each holder of escrows could opt for shares or cash in exchange for their percentage of ownership interest in those particular assets. (But where the purchase of NSM seems to have been protective of shares, maybe with this purchase they will be more protective of cash? I think it was critical for WMIH to purchase a company that has a proven track record in processing/dispensing loans, but with them being a "shell" company, cash would have been more necessary to accomplish this; in the future, shares will speak more loudly to those who understand their potential value.)
Unrelated to the merger with NSM, but related to the S4V scenario, I think it could be likewise with any other assets that may become available; such as if there are any assets that JPM does not want to purchase/pay fair market value for (IE: troubled assets from WMB, old branch buildings, property originally owned by WMB, such as the rumored land in the Permian basin, etc),I think it would be fair and reasonable for WMIH to bid on these possible assets, and for them to at least offer a portion of the purchase price to be done with shares. Certainly the FDIC (who would be facilitating the liquidation process on behalf of the WMB estate) would not hesitate to make WMIH the first potential buyer of anything that they might have to liquidate during their process of reconciliation of the PA&A with JPM. (Perhaps this is another scenario that required the purchase of NSM or similar company first?). However, I think this particular scenario, is probably quite a few months away. And of course with this scenario, I would trust that if the value of assets surpassed what could be offered in shares, then that particular asset would be liquidated and we would receive cash.
As for the safe harbored assets of which WMI is a direct owner (no involvement with JPM or FDIC), it is my understanding that escrow holders own a percentage of their value and so upon release of safe-harbor status, it does seem likely we will see some sort of payment once the SH status is lifted.
For the assets that have been performing (with their cash proceeds now presumably sitting in restricted bank accounts), I think we will receive our portion of that cash. But for the WMI trusts that are not 100% liquid yet, it seems like a good business move, to me anyway, for WMIH to make an offer to purchase escrow holders' remaining ownership interests in them with shares. Not only would this be an acquisition that the company could make with little or no upfront cash, but it would also provide them with additional cash with which to make new loans (they now will have the platform to do so again with the purchase of NSM) because of the guaranteed and subsequent continuing cash infusion; a continuing source of cash that would also cause the share price to immediately increase in value. I believe in this scenario we would potentially see real-time value that would otherwise be delayed as we waited for the cash distributions to happen. Yes, the cash distribution wouldn't happen immediately for WMIH, but a conservative estimate based upon them could be recorded into their receivables which usually translates into an immediate increase in share value.
Additionally, perhaps for those of us preferring to be paid with shares, since we would be helping WMIH increase their ownership interest, maybe we would be offered more shares than the equivalent value at the time of purchase (IE: if the illiquid portion of a trust is valued at 5B, our percentage of that 5B would be calculated into the current equivalent share value).
And for those who don't want shares? Who are concerned about possible dilution? For those who only want the cold hard cash? Then fine, each escrow holder could opt for that - no harm, no foul; it would only mean that the percentage of WMIH's ownership interest in the ongoing trusts wouldn't be increased by their amount (and they would probably receive regular cash distributions on whatever schedule the trust/s have been operating on, whether that is quarterly, semi-annually or whatever).
I think it would be a win-win-win for all concerned.
As for the NSM shareholders who would only be along for the ride during this exchange, how could they cry foul when an infusion (a potentially huge infusion of +24B) of assets and cash is exponentially increasing the value of their shares? It would be no different really than buying another company after this merger is complete; there would be costs involved, whether it be with cash or shares.
This is of course my own opinion. I could be wrong on any number of things, but this has been a complicated matter and there is still much that most of us do not know with certainty.
