Acquisition of Teche Holding Company by IberiaBank Corporation May Not Be in Shareholders’ Best Interests
Robbins LLP are investigating the acquisition of Teche Holding Company (NYSE MKT: TSH) by IberiaBank Corporation (NASDAQ: IBKC). On January 13, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Teche shareholders will receive 1.162 shares of IberiaBank for each outstanding Teche share. Based on IberiaBank’s closing price on January 10, 2014 of $62.10, Teche shareholders will receive $72.16 per Teche share.
Is the Proposed Merger Best for Teche and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Teche is undertaking a fair process to obtain maximum value and adequately compensate Teche shareholders in the merger.
As an initial matter, the $72.16 consideration represents a one day premium of just over 32% based on IberiaBank’s closing price on January 10, 2014. This one day premium is substantially below the average one day premium of over 47% for comparable transactions in the last five years. In addition, on October 24, 2013, Teche released its financial results for the period ending September 30, 2013, in which it reported record earnings per share for the fifth consecutive year. In particular, Teche reported a 20.2% increase in earnings for the 2013 fiscal year. Further, Teche increased its operating revenues to a record $48.5 million compared to $46.6 million for the 2012 fiscal year.
In commenting on the results, Patrick Little, Teche’s President and Chief Executive Officer, stated: “For the last two quarters, both consumer and commercial loans have had healthy increases, meanwhile, we’ve seen a slight decrease in total mortgage loan balances. The consequence has been a double-digit annualized growth rate for total loans and a good overall loan mix.”
Notwithstanding these promising business prospects, directors and executive officers of Teche, who collectively owned 30.76% of the company’s outstanding stock as of December 16, 2013, agreed to enter into a support agreement which provides that each will vote in favor of the transaction.
Given these facts, Robbins LLP is examining whether the Teche board of directors are seeking to benefit themselves with their decision to sell the company to IberiaBank now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Teche shareholders have the option to file a class action lawsuit to ensure the board of directors properly evaluates the proposal to obtain the best possible price for shareholders and the disclosure of material information.
Teche 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.