A bank investor hoping to profit from industry consolidation has adopted an unusual strategy for acquiring shares in Kankakee Bancorp in Illinois: offer stockholders less than market value for their stakes.

Ira Gaines, a principal of IG Holdings in Phoenix, recently offered shareholders $20.125 per Kankakee share. At midday Monday, Kankakee shares were trading at $23.875, about 18.6% higher than what Gaines offered.

Mr. Gaines, who is trying to amass a 2% stake in the company, said he plans to keep the shares as a long-term investment. "Small banks are the way to go because they're all going to be gobbled up," he said.

IG Holdings' offer may seem unreasonable, but it may be attractive to a shareholder who wants to liquidate a large number of shares in the lightly traded company. On average, only 318 Kankakee shares trade hands each day.

Some industry experts said, however, that IG Holdings' offer might take advantage of naive investors who are unaware of the shares' market value. That's why Kankakee sent a letter to its shareholders, listing recent market prices for the $405 million-asset company's shares.

"Our primary concern is for our shareholders," said Michael A. Stanfa, executive vice president of Kankakee. "We want to keep them informed."

Kankakee also sent to shareholders a copy of an article from the financial weekly Barron's that outlines Mr. Gaines' methods for accumulating shares in other companies. The article said Mr. Gaines and his partner, Barry Zemel, also of Phoenix, "seem to be betting that they can profit by catching investors asleep at the switch."

Mr. Gaines refused to discuss how his firm contacts shareholders. Mr. Stanfa said Kankakee learned of IG Holdings' offer through a brokerage firm, which is required to notify its clients of the offer.

Mr. Gaines and Mr. Stanfa said they did not know whether any Kankakee shareholders had sold stock to IG Holdings.

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