A bidding war on Long Island, N.Y., ended Monday, when Sunrise Bancorp said it accepted a $110 million buyout offer from Reliance Bancorp - rejecting the overtures of North Fork Bancorp.
The deal, at $32 a share - or about 1.6 times Sunrise's book value on June 30 - ends half a year of speculation over whether the $612 million- asset thrift based in Farmingdale, N.Y., would give in to pressure from Mattituck-based North Fork and its persistent president, John Adam Kanas.
"We are obviously a little disappointed that we were not the winning suitor, but as probably their largest shareholder, we're very pleased with the price," Mr. Kanas said. "We think that management and the board should be commended for maximizing shareholder value. It would have been nice to buy them, but at these prices it was out of our reach."
In January, Mr. Kanas had offered to buy the company for 136% of book value, or about $85 million in cash. Sunrise officials rejected that offer and refused even to meet with Mr. Kanas.
Mr. Kanas sweetened the deal earlier this month, offering to raise the price and structure the deal in all cash, all stock, or a combination to appeal to Sunrise directors and shareholders.
The $2.9 billion-asset North Fork also turned up the heat by purchasing 9.9% of Sunrise's stock with the approval of the Federal Reserve Board.
Sunrise had continued to reject the North Fork offers, but yielded two weeks ago to Mr. Kanas' demand that North Fork receive the same confidential information as other suitors.
Sebastian A. Albrecht, chairman of Sunrise, admitted that Sunrise officials had finally decided to put the bank up for sale because of the speculation in the stock, which he blamed on North Fork's public pronouncements.
"We had always told North Fork right from the beginning that we wished to remain independent and we continue to do so," Mr. Albrecht said. "But the price got up where we felt we probably had to do what we did."
Mr. Albrecht declined to say exactly how many offers the thrift received. But even North Fork's latest offer, he said, was far below the Reliance price.
The purchase, which is still subject to shareholder and regulatory approval, is expected to be completed in the first quarter.
Mr. Kanas said North Fork was not surprised by either the deal or the buyer, saying that bank officials "thought that we might very well see this kind of turn of events.
"We like to think of ourselves as having great price discipline," he added, explaining that other institutions are more willing than North Fork to risk diluting shareholder returns.
In a conference call with analysts, Reliance chairman Raymond L. Nielsen said Reliance officials expect a 30% dilution in tangible book value per share that will be partially offset by earnings over the next six months.
The acquisition is the second for Reliance this year. The company received regulatory approval in July for its purchase of Bank of Westbury, which it expects to complete this month. The two deals will bring Reliance's assets to $1.6 billion.