Activist investor pressures Virginia bank to sell
An activist investor wants Community Bankers Trust in Richmond, Va., to sell.
Driver Management, which owns about 1.5% of Community Bankers Trust's stock, said in a letter to shareholders that it questions the $1.4 billion-asset company’s ability to deliver value on its own.
Rex Smith, the company's president and CEO, did not immediately respond to a request for comment. Community Bankers Trust is the parent of Essex Bank.
Abbott Cooper, Driver's managing member, said in the letter that he believes Community Bankers Trust could garner a "significant premium" to its market value by selling itself.
"We further contend that a value-maximizing sale can be reached expeditiously if ... Smith is not an impediment and the board is able to explore all alternatives without being colored and influenced by a conflicted gatekeeper," Cooper wrote.
Cooper claimed that Smith has "unrealistic sale price expectations" and would only accept a deal in which he would remain part of senior management. "We believe the board has fallen into the trap of remaining overly-deferential to a CEO whose interests appear to conflict with those of shareholders," Cooper said.
Stephens analyst Brody Preston wrote in a Jan. 6 note to clients that he believes the company could receive $13 to $14 a share if it was sold, or 46% to 58% more than its current stock price.