Acquisition of Jefferson Bancshares, Inc. by HomeTrust Bancshares, Inc. May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the acquisition of Jefferson Bancshares, Inc. (NASDAQ: JFBI) by HomeTrust Bancshares, Inc. (NASDAQ: HTBI). On January 23, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which HomeTrust will acquire Jefferson Bancshares through a cash-and-stock transaction under which Jefferson Bancshares shareholders will receive $4.00 in cash and $4.00 in HomeTrust stock.
Is the Proposed Merger Best for Jefferson Bancshares and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Jefferson Bancshares is undertaking a fair process to obtain maximum value and adequately compensate Jefferson Bancshares shareholders in the merger.
As an initial matter, the $8.00 consideration represents a one day premium of only 22.5% based on Jefferson Bancshares’ closing price on January 22, 2014. This one day premium is substantially below the average one day premium of over 54% for comparable transactions in the last three years. Further, on October 29, 2013, Jefferson Bancshares released its earnings for the quarter ended September 30, 2013, which showed substantial increases in net income and earnings per diluted share. For the quarter, the company reported net income of $498,000, or $0.08 per diluted share, compared to $295,000, or $0.05 per diluted share, for the same period 2012. Moreover, Jefferson Bancshares is well-capitalized and has shown continued improvement in its asset quality.
In announcing these results, Jefferson Bancshares President and Chief Executive Officer, Anderson L. Smith, remarked on the positive trajectory of the company when he stated, “We are encouraged by our results for the quarter ended September 30, 2013, which include positive net earnings, increases in capital and continued improvements in asset quality. We have made significant progress in reducing our non-performing assets to $15.2 million at September 30, 2013 compared to $19.2 million at June 30, 2013 and $24.7 million at September 30, 2012. Delinquency levels have declined, with the 30-89 day category totaling $397,000 at September 30, 2013, compared to $4.1 million for the same period in 2012.”
Given these facts, Robbins LLP is examining the Jefferson Bancshares’ board of directors’ decision to sell the company to HomeTrust now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Jefferson Bancshares 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.
Jefferson Bancshares 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.