Blue Hill Advisors and Investors Reiterate Superior Proposal for Territorial Bancorp and Refute Territorial's Assertions

Rhea-AI Summary

Blue Hill Advisors and former Hawaii banking executive Allan Landon have reiterated their $12.50 per share cash offer for Territorial Bancorp Inc. (NASDAQ: TBNK), maintaining it as superior to the proposed merger with Hope Bancorp, Inc. (NASDAQ: HOPE). They urge shareholders to oppose the Hope merger, citing it as the second lowest valuation of an announced bank merger since 1983.

The investors argue that the Hope merger undervalues Territorial and would result in significant dilution for shareholders. They refute Territorial's claims about the merger's benefits, stating that it would actually result in a 7% discount to Territorial's current share price and lead to substantial job cuts.

Blue Hill Advisors emphasizes that their proposal offers a 26% premium and the opportunity for shareholders to participate in Territorial's recovery. They call on Territorial's Board to engage with their offer and urge shareholders to vote against the Hope merger at the upcoming November 6 special meeting.

Positive

• Blue Hill Advisors offers a superior $12.50 per share cash offer for Territorial Bancorp
• The investor proposal provides a 26% premium to shareholders
• Investors possess over $3 billion AUM in aggregate, ensuring sufficient liquidity for the proposed investment

Negative

• Hope merger would result in a 7% discount to Territorial's current share price
• Proposed Hope merger plans to cut >25% of Territorial's operating expenses ($10.5 million)
• Territorial shareholders would own only 5.6% of the combined company in the Hope merger
• Territorial has slashed its dividend from 23 cents to 1 cent over the last year

Insights

Financial Analyst

The ongoing battle for Territorial Bancorp presents a complex situation for investors. Blue Hill Advisors and partners are offering a $12.50 per share cash offer, representing a 26% premium over the current share price. This contrasts sharply with Hope Bancorp's merger offer, which currently values Territorial at a 7% discount to its market price.

Key points to consider:

• The Hope merger would result in significant dilution for Territorial shareholders, giving them only 5.6% ownership in the combined entity.
• Hope plans to cut >25% of Territorial's operating expenses, potentially impacting local operations.
• Regulatory approvals for the Hope merger are still pending from four different agencies.
• The Blue Hill offer provides an immediate premium and potential upside, while the Hope merger offers near-term benefits for Territorial shareholders.

Investors should carefully weigh the competing offers, considering both immediate value and long-term prospects. The situation remains fluid, with the potential for further developments before the November 6 special meeting.

Legal Expert

The competing offers for Territorial Bancorp raise several legal and regulatory considerations:

• Fiduciary duty: Territorial's board must act in shareholders' best interests. Their rejection of the higher Blue Hill offer could be scrutinized.
• Disclosure obligations: Both parties are making claims about their proposals. Ensuring accurate and complete disclosures is important to avoid potential SEC violations.
• Regulatory approvals: The Hope merger requires approvals from four agencies, which introduces uncertainty and potential delays.
• Shareholder rights: Investors have the right to change their votes before the special meeting, which could impact the outcome.
• Non-control investments: Blue Hill's proposal involves non-controlling stakes, which may simplify the regulatory process compared to a full acquisition.

These legal aspects underscore the complexity of the situation and the importance of due diligence and transparency throughout the process.

Reaffirm Commitment to Superior $12.50 Per Share Cash Offer for Territorial

Correct the Record on Board's Misleading Claims About the Hope Merger and Investor Proposal

Call on Shareholders to Remain Opposed to Merger with Hope as Board Refuses to Engage Toward Better Offer

Provide Updated Shareholder Presentation

HONOLULU, Oct. 9, 2024 /PRNewswire/ -- Blue Hill Advisors and former Hawaii banking executive Allan Landon today reiterated their previously announced superior $12.50 per share cash offer for Territorial Bancorp Inc. ("Territorial" or the "Company") (NASDAQ: TBNK) and corrected the record on Territorial's numerous assertions regarding the proposed merger with Hope Bancorp, Inc. ("Hope") (NASDAQ: HOPE) and the investor proposal. They also provided an updated presentation urging Territorial shareholders to remain unreservedly opposed to the "merger" between Territorial and Hope, a transaction which carries the second lowest valuation of an announced bank merger since 1983 and came after Territorial shareholders bore a nearly 70% decrease in value over five years.

"Shareholders should reject the fire-sale price that Hope is paying for Territorial," said Jason Blumberg, Managing Member of Blue Hill Advisors. "It is unfortunate that Territorial's Board has resorted to delays and misinformation instead of engaging with a better offer. The Board is giving shareholders little choice but to emphatically oppose the merger with Hope."

"We remain committed to our superior offer and are ready to move quickly through due diligence and closing if the Board changes their position," said Mr. Landon.

The updated presentation, which can be found at www.NewTerritorial.com, makes the case for opposing the Hope "merger" on the grounds that it was struck at the worst possible time for shareholders, dramatically undervalues Territorial and deprives shareholders of any recovery in the value of their shares due to the massive dilution they would suffer. In stark contrast, the investor proposal provides a substantial 26% premium or the opportunity to participate in the Territorial's recovery.

In addition, the presentation lays bare and corrects the record on Territorial's numerous false and misleading claims including:

Misleading Claims About Hope Merger	Fact Check	Fact
Shareholders will receive a 25% premium	FALSE	Shareholders would receive $9.95 if the Hope merger closed on 10/7, a 7% discount to Territorial's share price of $10.67
The Hope merger is good for employees	FALSE	Hope plans to cut >25% of Territorial's operating expenses ($10.5 million)
Territorial shareholders should be happy about getting an 11 cent dividend	FALSE	Territorial has slashed its dividend from 23 cents to 1 cent over the last year
Territorial shareholders will benefit longer term from a combination with Hope	FALSE	Hope shareholders will reap the rewards while Territorial shareholders will own a paltry 5.6% of the combined company
The Hope merger is close to receiving the required regulatory approvals	FALSE	The Hope merger requires regulatory approvals from four different federal and state banking agencies, the status of which is unknown
Hope is a safe and attractive investment	FALSE	Hope's balance sheet is saddled with risky commercial real estate loans at a time when those assets are under intense regulatory pressure and scrutiny
Territorial will remain a local bank	FALSE	Hope is headquartered in Los Angeles

 

Misleading Claims About Investor Proposal	Fact Check	Fact
The proposal is from Blue Hill Advisors	FALSE	The proposal is from six discrete experienced bank investors and former Hawaii banking executive Allan Landon
The investors are seeking to acquire or otherwise take control of Territorial	FALSE	The six discrete investors will each make a non-controlling investment in Territorial
The investors don't have the financing to complete the proposed investment	FALSE	The investors possess over $3 billion AUM in the aggregate and have more than enough liquidity to complete the investment on the proposed terms
The investors would have a tough time securing regulatory approval	FALSE	The investors' non-control regulatory approval process is straightforward and has been completed by numerous investors
The tender offer is unlikely to be successful	FALSE	A leading proxy solicitation firm has indicated that our 70% minimum tender threshold is readily achievable. However, the investors are willing to consider a lower threshold to complete our transaction

In addition to the updated presentation, investors can find more information on the superior proposal at www.NewTerritorial.com. 

Territorial shareholders are encouraged to contact Blue Hill Advisors for more information or to contact Territorial's Board to express their support for this proposal. Shareholders who have already voted FOR the Hope merger but who wish to change their vote can still do so before the November 6 special meeting of Territorial stockholders by following the instructions for changing votes as described in the prospectus that Hope filed with the U.S. Securities and Exchange Commission (the "SEC") on August 22, 2024.

Contacts

For Media:

Breitenbush Partners
Andrew Wilson, 773-425-4991
awilson@breitenbushpartners.com 

For Investors:

Blue Hill Advisors
Jason Blumberg, 917-733-0381
jason@bluehilladv.com

About Blue Hill Advisors

Blue Hill Advisors is an advisor to and investor in regional and community banks. The firm looks for opportunities that it believes have been substantially mispriced by the market and seeks to build long-term value through active management.

FORWARD-LOOKING STATEMENTS

Certain statements and information contained in this communication may be forward looking in nature and may constitute forward-looking statements. Forward-looking statements include all statements that are not historical facts and can typically be identified by words such as "may", "will ", "expect", "could", "should", "intend", "commit", "estimate", "anticipate", "believe", "remain", "on track", "design", "target", "objective", "goal", "forecast", "projection", "outlook", "prospects", "plan", "intend", or similar terminology, including by way of example and without limitation plans, intentions and expectations regarding the proposal to acquire Territorial and the anticipated results, benefits, synergies, costs, timing and other expectations of the benefits of a potential transaction.

Forward-looking statements are related to future, not past, events and are not guarantees of future performance. These statements are based on current expectations and projections about future events and, by their nature, address matters that are, to different degrees, uncertain and are subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future, and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in such statements as a result of a variety of factors, including, among other things, the ability of Territorial, on the one hand, and Blue Hill Advisors and certain other investors (collectively, the "Investors"), on the other hand, to agree on terms for the proposed transaction and, in the event a definitive transaction agreement is executed, the ability of the parties to obtain any necessary shareholder and regulatory approvals and financing, to satisfy any other conditions to the closing of the transaction and to consummate the proposed transaction on a timely basis, as well as changes in general economic, financial and market conditions and other changes in business conditions, changes in regulations, and many other factors, most of which are outside of the control of the Investors. The Investors expressly disclaim and do not assume any liability in connection with any inaccuracies in any of these forward-looking statements or in connection with any use by any party of such forward-looking statements. Any forward-looking statements contained in this communication speaks only as of the date of this communication.

The Investors undertake no obligation to update or revise its outlook or forward-looking statements, whether as a result of new developments or otherwise. Names, organizations and company names referred to may be the trademarks of their respective owners. This communication does not represent investment advice, a solicitation, a recommendation, an invitation, an offer for the purchase or sale of financial products and/or of any kind of financial services as contemplated by the laws in any country or state.

NO OFFER OR SOLICITATION

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.   

ADDITIONAL INFORMATION AND WHERE TO FIND IT

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal that Investors have made for a transaction with Territorial. In furtherance of this proposal and subject to future developments, Investors or certain affiliated entities (and, if a negotiated transaction is agreed to, Territorial) may file one or more registration statements, proxy statements, tender offer statements or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, tender offer statement, prospectus or other document Investors or any of their affiliates and/or Territorial may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF TERRITORIAL ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT, TENDER OFFER STATEMENT, PROSPECTUS AND/OR OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy statement(s) or prospectus(es) (if and when available) will be mailed to stockholders of Territorial, as applicable. Investors and security holders of Territorial will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC through the web site maintained by the SEC at www.sec.gov.

PARTICIPANTS IN THE SOLICITATION

This communication is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC.

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SOURCE Blue Hill Advisors

FAQ

What is the cash offer per share for Territorial Bancorp (TBNK) proposed by Blue Hill Advisors?

Blue Hill Advisors and former Hawaii banking executive Allan Landon have proposed a superior cash offer of $12.50 per share for Territorial Bancorp Inc. (NASDAQ: TBNK).

How does the Blue Hill Advisors offer compare to the Hope Bancorp (HOPE) merger proposal for Territorial Bancorp?

The Blue Hill Advisors offer provides a 26% premium, while the Hope Bancorp merger would result in a 7% discount to Territorial's current share price of $10.67 as of October 7, 2024.

When is the special meeting for Territorial Bancorp shareholders to vote on the Hope merger?

The special meeting for Territorial Bancorp stockholders to vote on the Hope merger is scheduled for November 6, 2024.

What percentage of the combined company would Territorial shareholders own in the Hope (HOPE) merger?

According to the investor presentation, Territorial shareholders would own only 5.6% of the combined company if the merger with Hope Bancorp (NASDAQ: HOPE) is completed.