Acquisition of Peoples Federal Bancshares, Inc. by Independent Bank Corp. May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Peoples Federal Bancshares, Inc. (NASDAQ: PEOP) by Independent Bank Corp. (NASDAQ: INDB). On August 6, 2014, the companies announced the signing of a definitive merger agreement pursuant to which Independent Bank Corp. will acquire Peoples Federal Bancshares. Under the terms of the agreement, holders of Peoples Federal Bancshares will elect between receiving $21 in cash or 0.5523 of an Independent Bank Corp. share for each Peoples Federal Bancshares owned.
Is the Proposed Acquisition Best for Peoples Federal Bancshares and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Peoples Federal Bancshares is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the merger consideration represents a premium of just 15.6% based on Peoples Federal Bancshares closing price on August 5, 2014. This premium is significantly below the average one-day premium of over 38% for comparable transactions in the past five years. On July 30, 2014, Peoples Federal Bancshares released its earnings for the third quarter of 2014. Specifically, the company reported increased net interest and dividend income of $4.5 million for the quarter ended June 30, 2014, compared to $4.2 million for the same quarter in the prior year. Further, the company reported a 3.6% increase in total assets from $585.2 million as of September 30, 2013, to $606.2 million as of June 30, 2014. Finally, the company’s payment of cash dividends increased from $0.04 in June 2013, to $0.05 in June 2014.
In light of these facts, Robbins LLP is examining Peoples Federal Bancshares’ board of directors’ decision to merge the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Peoples Federal 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.
Peoples Federal 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.