Blue Hill Advisors Encourages Vote Against Proposed Merger

Author: Caleb Price Updated: 10-01-2024 03:54 PM

Blue Hill Advisors Urges a No Vote on Territorial Bancorp Merger

Blue Hill Advisors LLC, alongside former Hawaii banking executive Allan Landon, has made headlines with a strong recommendation for Territorial Bancorp Inc. shareholders to vote against the suggested merger with Hope Bancorp, Inc. The advisory comes from Institutional Shareholder Services Inc. (ISS), a notable independent proxy advisory firm, which scrutinized the potential outcomes for shareholders in this proposed deal.

ISS's Conclusions on the Merger Proposal

In their assessment, ISS highlighted critical insights suggesting that the merger may not serve the best interests of shareholders. Specifically, they indicated that the merger with Hope Bancorp fails to maximize value for Territorial's stakeholders. Their report outlines several pivotal factors influencing this conclusion.

Concerns About the Valuation

One significant point raised by ISS refers to the absence of a robust sales process prior to the merger proposal. They noted the restrictions imposed by the merger agreement, which limit the board's ability to engage with other potential bidders, thereby safeguarding the merger from additional competitive offers. The report emphasizes, "the proposed merger with Hope does not seem to capitalize on maximizing shareholder value." This warning is primarily based on recent financial advancements in the market.

Viability of Competing Offers

Furthermore, ISS pointed out that, while there might be uncertainties, the competing offer from Blue Hill Advisors is considerable enough to diminish the risks associated with rejecting the merger with Hope. In fact, the analysis suggested that shares are currently trading higher than what the merger consideration implies, signaling a stronger market outlook for Territorial.

Insights from Blue Hill Advisors

Jason Blumberg, Managing Member at Blue Hill, expressed satisfaction regarding the ISS recommendation and articulated their readiness to expedite their proposal. "We believe our transaction will benefit all stakeholders involved with Territorial Bancorp, and we are optimistic about the outcomes that could emerge from a rejection of the current merger proposal," he stated.

Support from O'Brien-Staley Partners

Supporting this view, Jerry O'Brien, CEO of O'Brien-Staley Partners, echoed the sentiment, showcasing a keen interest in pursuing a superior proposal for Territorial at a more advantageous price. He acknowledged Allan Landon's pivotal role in facilitating this initiative.

Encouraging Shareholders to Act

As the special shareholder meeting approaches, Blumberg and his team urge Territorial shareholders to consider the current offer seriously. The proposal from Blue Hill reduces the risk for shareholders and provides a structured exit that couples cash premiums with ongoing equity in the company.

Changing Votes During the Special Meeting

Shareholders who have previously voted in favor of the merger with Hope still have the option to amend their votes before the special meeting. This flexibility allows interested stakeholders to reconsider their stance based on the evolving circumstances surrounding the proposals.

About Blue Hill Advisors and Their Strategy

Blue Hill Advisors specializes in advising and investing in community and regional banks, identifying opportunities that have not been accurately valued by the market. The firm is committed to establishing long-term value through an active management approach.

Frequently Asked Questions

What is the proposal from Blue Hill Advisors regarding Territorial Bancorp?

Blue Hill Advisors is advocating for shareholders of Territorial Bancorp to reject the proposed merger with Hope Bancorp, citing issues with maximizing shareholder value.

Why does ISS recommend against the merger?

ISS believes the merger does not maximize value for shareholders due to the limited sales process and potential for a more favorable competing offer.

What benefits does Blue Hill's offer provide?

The offer allows shareholders to realize a cash premium while retaining a portion of equity in the company, providing certainty of value with possible upside.

Can shareholders change their votes?

Yes, shareholders can change their votes prior to the special meeting by following the instructions detailed in the prospectus linked to the merger proposal.

What roles do Jason Blumberg and Jerry O'Brien play?

Jason Blumberg is Managing Member of Blue Hill Advisors, while Jerry O'Brien is CEO of O'Brien-Staley Partners, both advocating for a superior proposal for Territorial Bancorp shareholders.

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