HONOLULU - A group of investors led by former Hawaii banking executive Allan Landon reiterated their commitment to acquire Territorial Bancorp Inc. (NASDAQ: NASDAQ:TBNK) on Thursday, maintaining their offer should the bank's current sale to Hope Bancorp, Inc. (NASDAQ: HOPE) fall through. The reaffirmation comes ahead of Territorial's adjourned Special Meeting of Stockholders scheduled for November 6, where a vote on the proposed sale to Hope will take place.
Landon, together with Blue Hill Advisors, O'Brien-Staley Partners, and veteran bank investor Mark Lynch, have expressed a preference for a cooperative negotiation with Territorial's Board of Directors. Despite their efforts, the Board has so far declined direct discussions with the investors, who are prepared to move forward with their $12.50 per share cash offer promptly should the Hope transaction be rejected by shareholders.
The investor group has criticized the Board's process in agreeing to the sale to Hope, suggesting it was flawed and resulted in a deal at a time when Territorial's stock was near an all-time low. They argue that the banking sector's improved outlook, driven by expectations of lower interest rates, further undermines the rationale for accepting the Hope deal, which they deem undervalues the company.
Institutional Shareholder Services Inc. (ISS), an independent proxy advisory firm, has recommended that shareholders vote against the sale to Hope, suggesting the offer from Blue Hill Advisors appears credible and potentially more beneficial to shareholders.
The investors have called on Territorial shareholders to resist being swayed by the Board's recent communications and to evaluate the merits of their proposal. They have also provided a platform for shareholders to change their votes if they have previously voted in favor of the Hope merger.
This ongoing situation is based on a press release statement, and the outcome of the November 6 meeting could determine whether the investors' offer will be put into action or if the sale to Hope will proceed as planned.
In other recent news, Territorial Bancorp has been pushing for a merger with Hope Bancorp, despite Institutional Shareholder Services Inc. advising against it and Blue Hill Advisors LLC expressing interest in acquiring Territorial Bancorp. The merger, if approved, is expected to be completed by the end of the year. However, Territorial Bancorp has delayed the stockholder vote on the proposed merger, allowing for more engagement with stockholders. In a strategic move, Blue Hill Advisors and Allan Landon have increased their cash offer to purchase Territorial Bancorp.
On the financial front, Hope Bancorp reported a net income of $25.3 million, or $0.21 per diluted share, for the second quarter, with an adjusted income of $26.6 million, or $0.22 per share. However, the company anticipates a low single-digit loan growth and a 10% drop in net interest income compared to the previous year's quarter.
In the analysis sector, DA Davidson has raised the stock target for Hope Bancorp to $15.00, maintaining a Buy rating. This decision follows Hope Bancorp's second-quarter performance, which demonstrated a positive Net Interest Margin shift. These are the recent developments involving Territorial Bancorp and Hope Bancorp.
InvestingPro Insights
As Territorial Bancorp Inc. (TBNK) shareholders prepare for the upcoming Special Meeting, recent data from InvestingPro sheds light on Hope Bancorp Inc. (NASDAQ:HOPE), the proposed acquirer. HOPE's stock has shown significant momentum, with a 33.16% price total return over the past six months and an impressive 48.39% return over the last year. This upward trend is further emphasized by the stock trading near its 52-week high, at 98.75% of that peak.
Despite these positive indicators, InvestingPro Tips reveal that HOPE suffers from weak gross profit margins and expects a drop in net income this year. These factors could potentially impact the merged entity's financial performance if the acquisition proceeds.
On the other hand, HOPE has maintained dividend payments for 13 consecutive years, with a current dividend yield of 4.19%. This consistent payout history might appeal to income-focused TBNK shareholders considering the merger.
It's worth noting that analysts predict HOPE will be profitable this year, with a P/E ratio of 15.01, suggesting a reasonable valuation relative to earnings. The company's market capitalization stands at $1.63 billion, indicating its substantial presence in the banking sector.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for HOPE, providing a deeper understanding of the company's financial health and market position.
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