Robbins LLP: Acquisition of Bridge Capital Holdings (BBNK) by Western Alliance Bancorporation (WAL) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Bridge Capital Holdings (NASDAQ: BBNK) by Western Alliance Bancorporation (NYSE: WAL). On March 9, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Western Alliance will acquire Bridge Capital. Under the terms of the agreement, Bridge Capital shareholders will receive 0.8145 of a share of Western Alliance and $2.39 in cash, or the equivalent of $26.03, for each share of Bridge Capital common stock owned.
Is the Proposed Acquisition Best for Bridge Capital and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Bridge Capital is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $26.03 merger consideration represents a premium of only 18.5% based on Bridge Capital’s closing price on February 6, 2015. This premium is significantly below the average one-month premium of nearly 27% for comparable transactions within the past three years. Further, the $26.03 merger consideration is significantly below the target price of $28.50 set by an analyst at D.A. Davidson & Co. on March 10, 2015, and the target price of $27.00 set by an analyst at Keefe, Bruyette, & Woods on October 17, 2014.
On January 27, 2015, Bridge Capital announced strong earnings results for its fourth quarter 2014. In particular, the company reported net income of $17.6 million for the twelve months ended December 31, 2014, representing a $2.9 million increase over the same period one year prior. In addition, for the twelve months ended December 31, 2014, Bridge Capital reported earnings per diluted share of $1.13, compared to $0.97 for the twelve months ended December 31, 2013. Further, the company’s gross loans reached $1.31 billion at December 31, 2014, representing an increase of $91.6 million, or 8%, compared to gross loans of $1.22 billion at September 30, 2014.
In commenting on these results, Bridge Capital President and Chief Executive Officer Daniel P. Myers remarked, “We had another strong quarter of business development, with new client acquisitions helping to drive 30% annualized growth in our loan portfolio.… For the full year, we generated 22% growth in total loans, 10% growth in total deposits, 16% growth in earnings per share and 14% growth in book value per share. We were able to generate strong earnings while also making significant investments in personnel and infrastructure to support the continued growth of our franchise. As we continue to grow our revenue, we expect to see more operating leverage from the investments we made in 2014. We are seeing positive business development trends across all of our major lending groups and we anticipate another year of solid balance sheet and earnings growth in 2015.”
In light of these facts, Robbins LLP is examining Bridge Capital’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Bridge Capital shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Bridge Capital shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.