Yakira Capital Refutes Territorial Bancorp's Board of Directors' Public Concerns Related to Acquisition Offer from Blue Hill Advisors
Yakira Capital Management, holding 1.23% of Territorial Bancorp (TBNK) shares, criticizes the Board's rejection of Blue Hill Advisors' acquisition offer in favor of Hope Bancorp (HOPE) merger. The Blue Hill offer represents a 25% premium over the Hope deal. Yakira refutes the Board's concerns about the Blue Hill proposal, including tax implications and dividend considerations. The investment manager argues that the Board's refusal to negotiate with Blue Hill, despite potential superior returns for shareholders, may constitute a breach of fiduciary duty. Yakira confirms its intention to vote against the Hope deal.
Yakira Capital Management, che detiene l'1,23% delle azioni di Territorial Bancorp (TBNK), critica il rifiuto del Consiglio di amministrazione dell'offerta di acquisizione di Blue Hill Advisors a favore della fusione con Hope Bancorp (HOPE). L'offerta di Blue Hill rappresenta un 25% di premio rispetto all'accordo con Hope. Yakira respinge le preoccupazioni del Consiglio riguardo alla proposta di Blue Hill, comprese le implicazioni fiscali e le considerazioni sui dividendi. Il gestore degli investimenti sostiene che il rifiuto del Consiglio di negoziare con Blue Hill, nonostante i potenziali ritorni superiori per gli azionisti, possa costituire una violazione del dovere fiduciario. Yakira conferma la sua intenzione di votare contro l'accordo con Hope.
Yakira Capital Management, que posee el 1.23% de las acciones de Territorial Bancorp (TBNK), critica la decisión de la Junta de rechazar la oferta de adquisición de Blue Hill Advisors a favor de la fusión con Hope Bancorp (HOPE). La oferta de Blue Hill representa un 25% de prima sobre el acuerdo con Hope. Yakira refuta las preocupaciones de la Junta sobre la propuesta de Blue Hill, incluyendo las implicaciones fiscales y las consideraciones sobre dividendos. El gestor de inversiones argumenta que la negativa de la Junta a negociar con Blue Hill, a pesar de los posibles retornos superiores para los accionistas, puede constituir una violación del deber fiduciario. Yakira confirma su intención de votar en contra del acuerdo con Hope.
야키라 캐피탈 매니지먼트는 Territorial Bancorp (TBNK) 주식의 1.23%를 보유하고 있으며, Hope Bancorp (HOPE)와의 합병을 위해 Blue Hill Advisors의 인수 제안을 거부한 이사회에 대해 비판합니다. Blue Hill의 제안은 Hope 딜에 비해 25%의 프리미엄을 나타냅니다. 야키라는 Blue Hill 제안에 대한 이사회의 우려, 세금 문제 및 배당금 고려 사항 등을 반박합니다. 투자 관리자는 잠재적으로 주주들에게 더 나은 수익을 제공할 수 있는 Blue Hill과의 협상을 거부한 이사회의 태도가 fiduciary 의무 위반이 될 수 있다고 주장합니다. 야키라는 Hope 딜에 반대 투표할 의사를 확인합니다.
Yakira Capital Management, qui détient 1,23 % des actions de Territorial Bancorp (TBNK), critique le refus du Conseil d'administration de l'offre d'acquisition de Blue Hill Advisors en faveur de la fusion avec Hope Bancorp (HOPE). L'offre de Blue Hill représente une prime de 25 % par rapport à l'accord avec Hope. Yakira rejette les préoccupations du Conseil concernant la proposition de Blue Hill, y compris les implications fiscales et les considérations de dividendes. Le gestionnaire d'investissements soutient que le refus du Conseil de négocier avec Blue Hill, malgré des rendements potentiellement supérieurs pour les actionnaires, pourrait constituer une violation de ses obligations fiduciaires. Yakira confirme son intention de voter contre l'accord avec Hope.
Yakira Capital Management, das 1,23% der Anteile von Territorial Bancorp (TBNK) hält, kritisiert die Ablehnung des Angebots zur Übernahme von Blue Hill Advisors durch den Vorstand zugunsten der Fusion mit Hope Bancorp (HOPE). Das Angebot von Blue Hill stellt eine 25%ige Prämie im Vergleich zu dem Deal mit Hope dar. Yakira weist die Bedenken des Vorstands bezüglich des Blue Hill Vorschlags zurück, einschließlich steuerlicher Implikationen und Dividendenüberlegungen. Der Investmentmanager argumentiert, dass die Weigerung des Vorstands, mit Blue Hill zu verhandeln, trotz potenziell überlegener Renditen für die Aktionäre, einen Verstoß gegen die treuhänderischen Pflichten darstellen könnte. Yakira bestätigt seine Absicht, gegen den Deal mit Hope zu stimmen.
- Blue Hill's offer represents a 25% premium over the Hope Bancorp deal
- Blue Hill proposes to tender for 100% of shares
- Board's refusal to consider potentially superior acquisition offer
- 47% loss in share value over 10-year period under current leadership
- Recent dividend cut of approximately 40% in Q3 2023
- Current stock trading at significant discount to historical 5-year average of $17.75
Insights
The ongoing acquisition battle between Hope Bancorp and Blue Hill Advisors for Territorial Bancorp presents a significant arbitrage opportunity. Blue Hill's
The Board's resistance to engage with Blue Hill despite the superior offer raises serious governance concerns. Their arguments against the proposal appear weak - particularly regarding tax implications and liquidity concerns. The deal mechanics allow Territorial to explore Blue Hill's offer without risking the Hope transaction, making the Board's stance particularly questionable.
Key considerations for investors:
- Current spread between trading price and Blue Hill's offer indicates market skepticism about deal completion
- Yakira Capital's public opposition as a significant shareholder could influence other institutional votes
- Potential legal challenges over Board's fiduciary duty could impact deal timeline and outcome
This situation highlights critical corporate governance issues that could impact both Hope Bancorp and Territorial shareholders. The Board's apparent reluctance to evaluate a materially higher offer raises significant fiduciary duty concerns. Their justifications for rejecting engagement with Blue Hill appear procedurally flawed, particularly given the merger agreement's provisions allowing consideration of superior proposals.
The historical context is telling - Territorial's management oversaw a
Board of Directors Continues its Refusal to Consider a Superior Offer from Blue Hill Advisors, Potentially Breaching their Fiduciary Duty
Territorial shareholders should not have to fight for the Board to declare a proposal with a
Below are key points addressing each of the arguments that the Board of Directors has made, as to why they refuse to open negotiations with Blue Hill.
- "Hope deal is ~
25% premium to Territorial's closing stock price just prior to merger announcement" – The Blue Hill offer was a25% premium to the Hope deal, how is that not a superior proposal? - "A Blue Hill transaction would be taxable; the Hope Bancorp merger is not." – We find this argument disingenuous. Under current management the 5-year average on the TBNK stock is
$17.75 $9.46 $7 - "1,
000% + increase to Territorial's standalone dividend, increasing from$0.01 $0.11 40% less than the dividend shareholders received prior to management's slashing of the dividend in the 3rd quarter of 2023, just 8 months prior to the Hope deal. The adjusted dividend is also less than a4% yield. Shareholders would be much better off taking the additional25% in consideration and sticking it in a risk-free Treasury yielding over4% . - "If Blue Hill is unable to complete a
100% tender, the remaining Territorial shareholders would be left with an illiquid, stub minority investment in a controlled company and with limited rights." – The Blue Hill Proposal clearly states they will tender for100% of the shares. - "Territorial shareholders will not immediately receive any payment for their shares while any transaction with Blue Hill is sitting in regulatory limbo." – This is customary for any transaction. In fact, prior to the Blue Hill proposal, TBNK shares averaged a
4.75% discount to the implied price of the Hope deal. A similar discount to the$12.50 $11.90 - "No confidence that its proposed transaction is reasonably likely to close." – Without engaging with Blue Hill, how does the Board expect them to provide the necessary information to alleviate the stated concerns? It is unreasonable to expect them to provide the necessary information in a public forum.
- "In fact, the Blue Hill indication of interest presents so much risk and uncertainty, that if it were pursued, Territorial's stock – and the value of your investment – could be worth substantially less than it does today." – As we cited several times, we believe the tender offer of
$12.50
Why does the CEO & Chairman of the Board, Allan Kitagawa, the man who oversaw a total loss of share value of nearly
We believe management is breaching their fiduciary duty by not declaring the Blue Hill offer as "potentially likely to lead to a superior proposal". As a potentially superior offer, the Board has an obligation to consider it. We reiterate our intention to vote against the Hope deal.
About Yakira Capital Management
Yakira Capital Management is an SEC registered investment advisor based in
Cautionary Statement Regarding Forward-Looking Statements
This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein in any state to any person. The information herein contains "forward-looking statements". Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "potential," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if Yakira Capital Management, Inc's ("Yakira") underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Yakira that the future plans, estimates or expectations contemplated will ever be achieved.
Media Contacts
Ryan Walker
R.J. Walker & Co.
ryan@rjwalkerco.com
Duane Biasi
Director of Trading
Yakira Capital Management
(203) 349-8191
i Based off the TRA function on Bloomberg, including reinvested dividends from 04/29/14-04/29/24
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SOURCE Yakira Capital Management
FAQ
What is the premium offered by Blue Hill Advisors compared to the Hope Bancorp (HOPE) merger?
Why is Territorial Bancorp's board rejecting Blue Hill's offer in favor of Hope Bancorp (HOPE)?
How many shares does Yakira Capital own in Territorial Bancorp?
What is Yakira Capital's stance on the Hope Bancorp (HOPE) merger?
