The parent of a Massachusetts mutual savings bank is forging ahead with its plans to go public despite vehement protests from several depositors.
Cambridgeport Mutual Holding Co., parent of Cambridgeport Bank, plans to sell 6.8 million to 9.2 million shares at $10 each. The company, to be renamed Port Financial, would offer shares to the public and to depositors with balances of $50 or more as of Sept. 30. Livingston, N.J.-based Ryan, Beck & Co. is underwriting the deal.
The $763 million-asset thrift, which operates 10 branches in the Boston area, is owned by its depositors. One group, Community Acquisition Co. of Cambridge, Mass., recently tried to block the offering with its own plan to buy the thrift.
Community Acquisition, which consists of three of the thrift's depositors, argued that the IPO is unfair to depositors because they would not get the full value of Cambridgeport in a standard mutual-to-stock conversion.
The group's unusual proposal outlined a plan to issue free shares to Cambridgeport's depositors amounting to the institution's net value, which is estimated at $78 million. This would be accomplished through sale of the thrift to Community Acquisition, which would redistribute all the shares to depositors for free and list the stock on Nasdaq.
On Feb. 17, the thrift's trustees rejected the proposal; their lawyer said the plan is illegal under state banking law.
Massachusetts Banking Commissioner Thomas J. Curry, in a report approving Cambridgeport's mutual-to-stock conversion, said Community Acquisition's proposal implies that depositors of mutual holding companies have a right to the "accumulated historical net worth" of the institution in the form of free stock or cash upon conversion.
However, the law, state or federal, "simply does not create such a right," he wrote.
Jason Adkins, a lawyer representing Community Acquisition, said the group is determining its next move. "It's hardly a settled matter," he said.
Richard Schaberg, a lawyer at Thacher, Proffitt & Wood in Washington, which is representing Cambridgeport, called Community Acquisition's proposal a "dead issue."