A dissident shareholder is dropping his proxy fight against Eagle BancGroup after the company announced this week that it would consider selling.
Eagle, a $180 million-asset thrift holding company in Bloomington, Ill., has hired Trident Financial Corp. to advise it on whether to sell, merge, or remain independent. Trident, based in Raleigh, N.C., is the same investment banking firm that brought the company public in 1996.
Tuesday's announcement prompted well-known bank investor Lawrence B. Seidman to end his bid for a seat on Eagle's board. He and one of his supporters had hoped to be elected to the board at the company's annual meeting in April so they could try to force a sale.
"I'm just happy that they hired Trident," said Mr. Seidman, whose group controls 9.5% of Eagle's shares. "This is the right move to maximize shareholder value."
Donald L. Fernandes, Eagle's president and chief executive officer, said the board's decision to hire Trident was not related to Mr. Seidman's proxy fight. Mr. Seidman had been urging Eagle to sell since October.
"The board just thought that now was a good time," Mr. Fernandes said. "Trident is going to advise so the board can make good decisions."
Still, Trident's list of suitors for Eagle will probably be short, said Stephen Skiba, a bank analyst at ABN Amro in Chicago. The holding company for four-branch First Federal Savings and Loan is too small to attract the large buyers that dominate the market, such as Cleveland-based National City Corp., Mercantile Bancorp. of St. Louis, or Chicago-based Bank One Corp., he said.
"The best thing for (Mr. Seidman's group) would be if the company bought them out," Mr. Skiba said.
Shares of Eagle stock rose more than 9% on the news that the company could be for sale, closing at $22 Tuesday. The stock increased again Wednesday, closing at $23.
