Boston Private Financial Holdings will take a second stab on Tuesday to collect enough shareholder votes to proceed with its sale to SVB Financial Group in Santa Clara, Calif.
The $10.5 billion-asset Boston Private, which agreed in January to be sold to the
HoldCo Asset Management, which owns 4.9% of Boston Private’s shares and has objected to the merger, has used the additional time to push shareholders to reject the deal. The New York investor has asserted that Boston Private did not give enough consideration to other buyers and failed to attract an acceptable price.
Rejecting the sale to SVB would “pave the way for a competitive and comprehensive sales process supervised by a stronger, independent board,” HoldCo has stated in communications with other investors. HoldCo also wants to replace three Boston Private directors with its own nominees.
While Boston Private has said that an “overwhelming majority of votes cast to date support the transaction,” Massachusetts law requires the two-thirds backing. The vote can be postponed twice, so it is possible Boston Private could seek another delay.
SVB said in a regulatory filing Friday that, while it remains committed to the deal, “under no circumstance will it increase the purchase price, including if the deal is not approved by Boston Private’s shareholders.”
Industry observers said the most likely scenario is that investors will back the deal, given SVB’s stance on the price and the fact that, at this stage, Boston Private would basically have to start from scratch to find a new buyer — with no guarantees on a higher price.
“Any intelligent offer from a third party would require extensive due diligence, which is clearly not happening,” Alexander Twerdahl, an analyst at Piper Sandler, said in a recent note to clients. It is “unlikely that another bank will step in at a higher price, at least in the near term.”
The proxy advisory firms ISS, Glass Lewis and Egan-Jones have each recommended that shareholders vote in favor of the deal.
HoldCo was
The premium, which priced Boston Private at 115% of its tangible book value, is much smaller than those of other recent deals involving banks with notable Boston operations.
Century Bancorp in Medford, Mass.,
Boston Private, which has declined interview requests, said in April that appreciation in SVB’s stock price since the announcement had raised the deal’s implied value, while dismissing HoldCo’s critiques.
“Having no on-the-ground experience with bank M&A processes, HoldCo subscribes to a black-and-white, purely theoretical philosophy by which auctions must automatically lead to the best outcome for shareholders,” Boston Private’s board said in the statement.
“The transaction process … was not an academic exercise undertaken in an ivory tower — it was a real-world negotiation carefully designed and calibrated with the advice of expert advisors to maximize value for Boston Private shareholders,” the board added. “In the real world, the tone of a conversation matters, timing matters and reasoned and experienced assessments of a potential acquiror’s preparation, seriousness and ability to pay matter.”
