Will Bank of America raise it's bid for Countrywide?

A major hedge fund by the name of SRM Global has amassed a stake of 5.2 percent in shares of Country Wide Financial and believes the offer price is too low and is not in the best interest of shareholders.

Bank Of America last month announced that they are acquiring Countrywide for 4 billion dollars in stock which amounts to a price of under 8 dollars. SRM Global and trader Jonathan Wood feel that fair value is around book value of over 20 dollars a share.

With the fed aggressively cutting rates and expected to cut even further, some on wall street feel that the situation has improved for lenders and that countrywide financial may be able to survive the credit crunch and stay independent.

We will see what transpires in the coming weeks as this deal is expected to close in the 3rd fiscal quarter in 2008.

In other developments, Beazer Homes is exiting the mortgage business and will recommend these services to there customers in an announced marketing deal with countrywide.