Silicon Valley Bank’s parent company has said it will not increase its bid for Boston Private Financial Holdings despite opposition from a major investor.
SVB Financial Group tabled a bid in January for Boston Private, which valued the parent company of Boston Private Bank & Trust at approximately $900 million.
However, HoldCo Asset Management, which owns 4.9% of Boston Private’s shares, earlier this month used a report from Institutional Shareholder Services (ISS) to flag its own concerns about the purported benefits of the transaction.
Boston Private put the deal to shareholders on April 27 but adjourned the meeting until May 4. In a statement, Boston Private said the delay would give it more time to “solicit additional proxies from shareholders to approve the merger agreement” and allow shareholders to consider the most recent quarterly updates from both banks.
It said the “overwhelming majority” of votes cast so far were in favor of the SVB bid.
In a brief statement dated April 27, SVB Financial said: “To provide clarity to Boston Private shareholders, SVB is confirming it will not increase the purchase price if Boston Private shareholders do not approve the transaction at the adjourned meeting.”
HoldCo opposes the proposed combination of SVB and Boston Private and instead wants a “competitive and comprehensive” sale process to be overseen by a more independent board. ISS had highlighted in its report that Boston Private might not have been “as responsive to outreach from potential bidders as shareholders may have preferred”.
Despite HoldCo’s use of the ISS report, both ISS and fellow proxy advisory firm Glass Lewis have both recommended Boston Private shareholders vote in favour of the transaction.
The bank has highlighted to investors that the bid represents a 56% premium to Boston Private’s “unaffected share price as of immediately prior to announcement of the transaction”.
In a letter to shareholders, the bank said: “The board believes that HoldCo’s illusory proposal is a reckless gamble based on arguments without merit that, if successful, would imperil the value of your investment in Boston Private.”