Two months after Cohoes Bancorp and Hudson River Bancorp announced a deal to merge, three unsolicited bids from upstate New York competitors are threatening to upset their plans.
Cohoes, a $749 million-asset company based in Cohoes, N.Y., has received buyout offers in recent weeks from Trustco Bank Corp. of Schenectady and Ambanc Holding Co. of Amsterdam, it was disclosed Monday in Securities and Exchange Commission documents.
Both have offered well above what Hudson River, of Hudson, N.Y., had agreed to pay when its stock deal with Cohoes was announced April 26. That price then worked out to $11 per Cohoes share.
Trustco has offered to buy $1.1 billion-asset Hudson River for stock now valued at $14 per share, or nearly $250 million in all.
But both Cohoes and Hudson River have rejected the proposals and said they will move forward with their deal. Officials at both companies depicted the offers as attempts to scuttle their merger, which would create the largest thrift company in the state-capital region, with $1.8 billion of assets
"This was done purely to stop our deal from happening," said Hudson River president Carl A. Florio. He added that Hudson River is "not for sale," even at a price that is 14% above its current trading price of $12.25.
"Fourteen dollars is not a number I'm willing to talk about," he said.
Cohoes' president Harry L. Robinson characterized the proposal as a ploy to "forestall the competition." He said the higher per-share offers are merely attempts to persuade Cohoes shareholders to vote against the merger with Hudson River.
"They have no intention to buy us," Mr. Robinson said.
On June 9, $2.4 billion-asset Trustco offered stock worth $16 per Cohoes share, or roughly $126 million. Ambanc's cash offer was $15.25 a share, or $120.6 million.
Cohoes' stock was trading at $14.375 at midday Tuesday, up about 4% from Monday.
In an open letter scheduled to run in local newspapers today, Trustco president and chief executive officer Robert A. McCormick says the offer was made as an attempt to preserve local ownership of Cohoes and Hudson River, which he called prime candidates for an out-of-town takeover. He said Trustco is motivated by a "bedrock belief that this area needs a strong, locally owned and managed bank.
"Banks headquartered in distant cities do not, indeed cannot, put our interests first. We can - and do," he said.
Ambanc, with $749 million of assets, also said its offer was a serious one. But CEO John M. Lisicki said Cohoes dismissed the offer without even considering it.
"We are very sincere in our desire to acquire the company at that price," he said of the bid, which is set to expire on June 30.
Unsolicited offers are fairly unusual in the banking industry, said Scott Valentin at Friedman, Billings, Ramsey & Co. in Arlington, Va. In this case, he said, the offers are a response to industry consolidation in upstate New York.
Weeks after Hudson River and Cohoes announced a deal to merge to form a holding company with 38 branches in eight counties, Troy Financial Corp. of Troy, N.Y., said it would buy Catskill Financial Corp. of Catskill, N.Y., boosting Troy's assets to $1.2 billion.