Acquisition of Home Federal Bancorp, Inc.by Banner Corporation May Not Be in the Best Interests of Home Federal Bancorp, Inc. Shareholders
Robbins LLP is investigating the acquisition of Home Federal Bancorp, Inc. (NASDAQ: HOME) by Banner Corporation. On September 24, 2013, the two companies announced the signing of a definitive merger agreement under which Banner Corporation will acquire Home Federal in an all cash transaction for $13.40 per share. The board of directors of both companies have unanimously approved the agreement. The transaction is expected to close in the first quarter of 2014.
Is the Merger Best for Home Federal and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Home Federal is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger. As an initial matter, the $13.40 consideration represents a premium of just 5.9% based on Home Federal’s closing price on September 24, 2013. This premium is substantially below the median one-day premium of 29.83% for comparable transactions in the last five years. Further, the merger consideration is considerably below the target price of $15.00 set by an analyst at D.A. Davidson on July 29, 2013. Moreover, Home Federal has traded above the offer price as recently as August 29, 2013, reaching a high of $13.59.
On July 26, 2013, Home Federal issued a press release announcing the company’s earnings for its second quarter 2013, reporting increases in net interest income and net interest margin. For the quarter, Home Federal reported an increase net interest income of $610,000 compared to the quarter ended March 31, 2013. The company also reported a substantial increase in in net interest margin of 4.47% for the quarter, as compared to 4.16% for the previous quarter.
Given these facts, Robbins is examining Home Federal’s board of directors’ decision to sell the company to Banner Corporation now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects, and whether they are seeking to benefit themselves.
Home Federal shareholders have the option to file a class action lawsuit to secure the best possible price for shareholders and the disclosure of material information so shareholders can vote on the transaction in an informed manner.
Home Federal shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Darnell R. Donahue at (800) 350-6003.