Just three weeks after its deal to be acquired by another bank fell through, Virginia Beach-based Seaboard Bancorp has agreed to be bought by neighboring Life Bancorp.
Life Bancorp, a $1.1 billion-asset thrift in Norfolk, Va., swooped in to buy the $84 million-asset thrift after it sensed that Seaboard's initial deal was having problems.
"It was kind of unusual," said Merrill H. Ross, an analyst at Wheat First Butcher Singer in Richmond. "Not all that different from what happened at the Bank of Boston, but with a different outcome - and on a smaller scale, of course."
Seaboard used the offer from $103 million-asset Bank of Hampton Roads in April to let other banks know that it was up for sale and perhaps attract other offers. In the succeeding months, several other banks came forward with expressions of interest.
The $8.2-million deal offered by Life is all cash and only 10 cents a share more than what the original suitor had offered. The primary difference is that the Hampton Roads offer consisted mostly of an exchange of its thinly traded stock, whose true value was difficult to assess.
Though analysts and others close to the situation said Seaboard shareholders junked the deal with Bank of Hampton Roads because of its illiquid stock, Seaboard's president, P. Douglas Richard insisted that it was Bank of Hampton Roads that pulled out.
"We did not terminate that offer with Hampton Roads," said Mr. Richard. "They just didn't want to get into a bidding contest. In the view of our board, Life made the highest offer."
Life's offer was about $500,000 higher than the approximately $7.7 million stock and cash deal offered by Bank of Hampton Roads. The Life offer is 1.35 times Seaboard's book value.
"When nothing came forth, we figured maybe something was up," said Edward E. Cunningham, president and chief executive of Life. "So we hired some consultants and quickly got a letter of intent in there to beat them before they closed the deal - which we did."
Life expects the deal to close by the end of the year, or early next year, pending shareholder and regulatory approval.
Life's deal was all cash because it raised more than $100 million as part of its initial public offering last fall. The deal was the first of several acquisitions the bank may make in the coming months to deploy its excess capital.
"We're not going to sit back on our duffs with the capital that we raised," Mr. Cunningham said. "We want to be a player in the market."