Talk about a motivated seller.
New England Bancorp in Hyannis, Mass., decided it was worth going to great lengths to finally seal a deal with a buyer — even if it meant closing all of its branches first.
The $260 million-asset parent of Bank of Cape Cod pledged as
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Independent Bank Corp. in Rockland, Mass., has agreed to buy New England Bancorp in Hyannis, Mass., the parent of Bank of Cape Cod, for $30.7 million.
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Roughly 90 banks that participated in the government's lending program still owe money to the Treasury Department and face a massive dividend increase. Many of those could view selling as a better alternative to raising new capital.
March 24 -
Loan growth at several Boston banks, including many former mutuals, is higher than the national average. Still, bankers are closely watching for any indication that a bubble is forming.
May 6
Independent eventually decided to keep one branch in Osterville open.
How New England Bancorp came to the point of taking such an unusual step was laid out in the filing. It had spent more than two years trying to find a buyer, flirting with sales on two occasions before starting talks with the $7.2 billion-asset Independent. The company contacted seven institutions in late 2013; five expressed interest, and one offered to pay $12.50 a share in cash.
The interested party withdrew its offer in early 2014 after a talk with regulators made it clear the company would not get approval to complete the deal.
New England Bancorp would never get a higher offer.
The company tried casting a bigger net, reaching out to 30 institutions in March 2014. Only one bank submitted a bid — a cash offer of $9.28 to $9.67 a share that New England Bancorp's board viewed as insufficient.
Talks with Independent began in July 2015, when Timothy Telman, New England Bancorp's president and chief executive, was connected with his counterpart at Independent, Christopher Oddleifson.
Independent was not the only bank interested in New England Bancorp, though. The filing disclosed that the CEO of another institution based in Massachusetts started talking to Telman in late October.
Throughout the rest of the year, Telman met with various executives at both institutions, and New England Bancorp eventually entered into confidentiality agreements with each suitor.
Independent originally offered to pay $11 a share, with up to 20% in cash, before indicating that it could pay up to $11.50 in an all-stock transaction. The other company in early January stated that it would likely be willing to pay a price closer to $10 a share.
New England Bancorp's board decided during a Jan. 11 meeting to enter into exclusive negotiations with Independent. Independent later agreed to slightly increase the exchange ratio, and a deal was announced on March 17. The all-stock deal is expected to close in the fourth quarter.
The companies also agreed to redeem preferred stock that
Moreover, the filing disclosed that Telman will receive an $860,000 payment under a pre-existing change-in-control agreement. Telman, who is leaving the company when the deal closes, will also receive $30,000 monthly as part of a one-year consulting and noncompete agreement with Independent.
