Robbins LLP: Acquisition of Hampden Bancorp, Inc. (HBNK) by Berkshire Hills Bancorp, Inc. (BHLB) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Hampden Bancorp, Inc. (NASDAQ: HBNK) by Berkshire Hills Bancorp, Inc. (NYSE: BHLB). On November 4, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Berkshire will acquire Hampden and its subsidiary, Hampden Bank. Under the terms of the agreement, Hampden shareholders will receive 0.81 shares of Berkshire Hills common stock for each share of Hampden common stock owned, for a consideration of $20.53 per share based on Berkshire’s closing price on November 3, 2014.
Is the Proposed Acquisition Best for Hampden and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Hampden is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the proposed consideration represents a premium of 20.8% based on Berkshire’s average closing price for the five day period ending November 3, 2014. This premium is significantly below the average one-week premium of over 35% for comparable transactions within the past five years. Further, on November 4, 2014, Hampden released its earnings results for the quarter ended September 30, 2014. In particular, Hampden reported an increase in net interest income of 9.1%, compared to the same period in 2013. Hampden also increased cash, and cash equivalents increased by $5.7 million, or 44.9%, from June 30, 2014 to September 30, 2014. In commenting on these results, Glenn S. Welch, President and Chief Executive Officer, remarked, “Earnings remained stable compared to first quarter fiscal 2014 and prior quarter. However, net interest income showed an increase compared to first quarter fiscal 2014 and prior quarter as a result of the significant loan growth and an improvement in our asset yield with our continued emphasis on growing commercial loans…. We believe our loan growth and an emphasis on expense control will allow us to continue to report strong earnings and deliver sustainable stockholder value.”
In light of these facts, Robbins LLP is examining Hampden’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.
Hampden 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.
Hampden 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.