Banks that want to sell themselves generally have a hard time finding a buyer these days, but not so for CNB Financial Corp. in Worcester, Mass.
Suddenly the $297 million-asset company has two offers: United Financial Bancorp Inc. in West Springfield said this week that it is putting in a bid for CNB, which agreed last month to sell itself to Berkshire Hills Bancorp Inc. in Pittsfield.
United is offering $22.8 million in cash and stock for CNB — about 26% more than what Berkshire agreed to pay.
"It's a nice feeling," Charles Valade, CNB's president and chief executive officer, said in a brief interview Thursday.
He would not discuss the matter further, but CNB said its board would review the offer.
Mike Shafir, an analyst at Sterne Agee & Leach Inc. who follows both United and Berkshire, said buying CNB would be beneficial for either company.
CNB's six branches are contiguous to their existing markets and offer entry to the Worcester area, the second-most populous city in New England. CNB also has about $200 million of deposits, including a "decent amount" of core deposits, Shafir said.
But, he said, the bidding war was a surprise — and a rarity lately.
""It's a unique situation, especially in the current environment," he said.
The number of deals announced this year is down significantly, partly because many of those strong enough to buy fear what trouble might lurk in others' loan portfolios.
And much of the activity so far has involved distressed sellers going for discounted prices.
Nationwide 49 deals have been announced, according to data from Carson Medlin Co. (Three have since collapsed.) By this point last year there were 72 announced deals. (Ten were later terminated.)
Richard B. Collins, the president and CEO of the $1.2 billion-asset United, called his company's proposal "superior" to Berkshire's.
"We have followed the progress of the Commonwealth franchise for some time and we are very interested in expanding our branch network into the Worcester market," he said in a press release. "We have the capital, we are familiar with the Worcester area and we know the Commonwealth team."
Collins did not return a phone call to discuss the matter by press time Thursday.
A spokeswoman for the $2.7 billion-asset Berkshire declined to comment.
United offered $10 a share for CNB. Half would be paid in cash and half in stock.
Initially Berkshire's deal for CNB had worked out to $19.5 million, or $8.50 a share. But the price would be paid entirely in stock, and the value of Berkshire's shares has fallen about 9% since the deal was announced April 29. As of Thursday, its offer would equate to $7.91 a share, Shafir said.
He attributed the decline in the shares' value partly to Berkshire's decision this week to sell at least $30 million of common stock. "That will be dilutive to earnings," he said.
On the same day it announced the CNB deal, Berkshire had said that it would repay the $40 million in government capital it received in December.
But Shafir said the stock offering was not a given, because Berkshire did not need to raise capital to exit the Treasury Department's Troubled Asset Relief Program. Berkshire had already done a stock offering in October that raised $36 million.
Berkshire — which priced the latest offering at $21.50 a share on Tuesday — said it intends to use the money to expand into new markets.
The company had said that it expected to close on the deal for CNB in the third quarter.
In an interview just after the deal announcement, Michael P. Daly, Berkshire's president and CEO, called CNB an "attractive" target. "They were not in a pinch," he said. "For a bank their size, at some point they begin to wonder what their next step is going to be, either by sticking to where they are or partnering with another company."
Berkshire said then that it would be paying 99% of CNB's tangible book value, and that it would be able to cut one-quarter of CNB's expenses.
Berkshire's shares were trading at $21.40 each midday Thursday, down from $23.45 when the CNB deal was announced.
