Evergreen Bancorp adopted a poison pill plan late last week, creating doubt among analysts who expected the Glens Falls, N.Y., company to announce a sale.
A rumor that the $1 billion-asset bank had a deal to be acquired caused its stock to jump $9 in two days last week, peaking at $33.50 last Thursday before closing at $31 that day. But after trading closed on Friday, Evergreen announced it had adopted a plan "to discourage takeovers that involve tactics that do not provide fair value to shareholders."
Analysts are now left wondering whether the so-called poison pill was put in place to keep the bank independent or to discourage uninvited bidders from getting in the way of negotiations between the bank and a friendly acquirer.
"The timing is curious," said Kenneth F. Puglisi, who follows Evergreen for Sandler O'Neill & Partners in New York. "It is hard to say what is going on at the bank right now."
"Last week, the rumor was that a deal had been cut," said another analyst, who asked not to be identified. "It is not clear now whether the rights plan is intended to shield that deal from third-party bidders, or to protect the independence of the company."
The takeover talk was centered on three New York suitors: First Empire State Corp., Buffalo; Albank Financial Corp., Albany; and Trustco Bank Corp. of New York, Schenectady. Chittenden Corp. and Banknorth Group Inc., both of Burlington, Vt., were also mentioned as logical candidates to acquire Evergreen.
Evergreen's stock closed at $30.125 Friday, before the shareholder rights plan was announced. It continued to drop this week and was trading at $27.50 at midday Tuesday.
George W. Dougan, Evergreen's chairman and chief executive officer, is revealing little about his company's intentions.
"Although the bank has from time to time held discussions about business combinations, the board of directors has determined that the shareholder rights plan is an effective and reasonable way to safeguard the interests of our shareholders, employees, and customers," Mr. Dougan said in a release announcing the shareholder plan. He did not return calls seeking further explanation.
Evergreen has fought off uninvited advances before. In 1993, the bank withstood an unsolicited bid from KeyCorp.
If there is going to be a deal, Mr. Puglisi said, he believes it will not happen until Evergreen's price falls back to its trading range before last week's surge. At around $30 per share, "it is difficult to imagine anyone paying a premium on that price," he said.
But chances are that Evergreen's days are numbered, analysts said.
"These guys have been the subject of potential takeout talk for a long time," said Don J. Kauth, analyst with BT Alex. Brown in New York. "At some point, it is logical that someone will make a successful offer."
