The Bank Slate

INSIGHTS INTO THE BANKING INDUSTRY

Proxy adviser ISS: Territorial investors should reject sale to Hope Bancorp

Institutional Shareholder Services has recommended that Territorial Bancorp shareholders reject the Honolulu company’s pending sale to Hope Bancorp in Los Angeles.

The proxy advisory firm also made comments supportive of an unsolicited bid for the $2.2 billion-asset Territorial by a group that includes banking veteran Allan Landon and Blue Hill Advisors.

“Given the lack of a robust sales process, the fact that the merger agreement restrictions accepted by the board limit its ability to engage with a competing bidder, and the improved outlook for financial institutions, the proposed merger with Hope does not appear to maximize value for shareholders,” ISS said in its report.

“Despite some uncertainty, the competing offer … appears sufficiently credible to mitigate the downside risk of rejecting the proposed merger – as reflected by the fact that shares are currently trading above the implied merger consideration,” ISS added.

The $18.1 billion-asset Hope agreed earlier this year to pay $77.9 million for Territorial. The Landon-Blue Hill group has proposed a tender offer where it would pay $12.50 a share for at least 70% of the Hawaiian bank.

Territorial’s board has rejected the Landon-Blue Hill proposal, questioning its certainty.

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