A merger in the Virginia Beach area that would have created a $187 million-asset bank has collapsed, and dissident shareholders may have been the reason.
Seaboard Bancorp signed a letter of intent three months ago to be acquired by neighboring Bank of Hampton Roads, but last week the deal was scrapped.
Sources familiar with the situation said a handful of Seaboard stockholders blocked the deal. The stockholders objected to exchanging their stock for the thinly traded Bank of Hampton Roads stock, the sources said.
"Several of the key players there said, 'Hey, we're not going to let this thing fly,'" said one observer, who asked not to be named. "It wasn't the price, but just that the Hampton Roads stock wasn't liquid enough."
But Seaboard's president, P. Douglas Richard, said the proposed acquisition was terminated because Bank of Hampton Roads decided not to raise its offer price of $7.7 million after other banks stepped forward in recent months with higher bids.
"It wasn't up to us," said Mr. Richard. "We didn't have any reason to terminate it."
The $103 million-asset Bank of Hampton Roads had offered to exchange one of its shares for every 10.32 shares of Seaboard stock, which would have valued Seaboard's shares at $1.55. The price was 1.35 times Seaboard's book value.
The other banks that reportedly have expressed interest in buying Seaboard include Life Bancorp of Norfolk and Central Fidelity Banks Inc. and Crestar Financial Corp., both of Richmond. Life recently raised $100 million in capital and is considered a top contender, analysts said.
Mr. Richard said the two institutions anticipated other offers after their announcement in April. Seaboard has no time frame for finding a new suitor, he said.
Seaboard Bancorp is the $84 million-asset holding company of Seaboard Savings Bank, which has three branches in the Virginia Beach area.