Activist Targets Abington Bank
Updated with additional information
Seidman, a longtime activist investor in bank stocks, has bought 1.02 million shares, or a 5.05% stake, in Abington, according to the most recent Schedule 13D filing with the Securities and Exchange Commission. Through various affiliate investment firms, Seidman paid a total of $8.46 million for the stake.
Gerard Cassidy, a managing director and equity research analyst at RBC Capital Markets, said at an industry gathering last week that Seidman is likely "stirring up the pot" at Abington and wouldn't be surprised if the bank was sold.Indeed, Seidman is looking to get the bank to sell out. During a meeting with the bank's management last week, "I told them very simply that the bank should be sold," Seidman told TheStreet on Tuesday. "Their view is different. They didn't say no. ... In my view that's the best way to maximize the value." Abington and Seidman are supposed to have further conversations by the end of October, he says. He declined to speculate on who might be an appropriate buyer for the bank. If Abington were to agree to sell though, there is likely no shortage of potential buyers, which could include First Niagara Financial (FNFG), PNC Financial, even TD Bank (TD). Banks Brace for M&A Boom Abington Bancorp, the holding company for Abington Savings Bank, has 13 full-service branches and several other limited service centers in Pennsylvania. It is exactly the type of small community bank that industry experts say could become a target as traditional bank M&A gradually returns to the sector. Abington Bank declined to comment to TheStreet on Tuesday. The New Bank M&A Paradox European, Regional Banks to Drive Mergers Bank CEOs Play Down M&A Keefe, Bruyette & Woods (KBW) named Abington as one of 26 potential sellers in its KBW Takeover List, a part of a broader bank M&A research report, released in June. "We are more cautious on investment opportunities for our list of 26 sellers due to legacy asset issues, with our positive bias limited to those companies generally with an attractive footprint, a higher proportion of low-cost deposits, above-average normalized earnings power and strong fee income businesses," the note said. Abington, along with Boston Private Financial (BPFH), Cardinal Financial Corp. (CFNL), Encore Bancshares (EBTX), Susquehanna Bancshares (SUSQ), Western Alliance Bancorp (WAL) and Wilmington Trust (WL) are banks that "best demonstrate" these characteristics, KBW said. Abington Bank hit a new 52-week-high during Tuesday's trading of $10.99, rising with the broader markets. Based on the new high, the stock is up is 62% year-to-date. Shares are up 12% since August 20th, the day that Seidman filed his Schedule 13D with the SEC. Seidman is no stranger to community bank M&A targets. He's been investing in small banks for years that he perceives as potential takeout targets and forcing them to either change direction to increase shareholder value or sell out. Seidman has frequently nominated himself or associates to banks' board of directors and more than once has entered into legal tussles with banks he owned. Seidman currently sits on the board of directors at Center Bancorp (CNBC) and Stonegate Bank (SGBK). In 2007, he was at center stage for PNC's takeunder of Yardville National Bank. In addition, he has been successful in other bank takeouts such as American Bancorp's sale to Investors Bancorp (ISBC) of Short Hills, N.J. in June 2009; Beverly National Corp. to Danvers Bancorp (DNBK) of Danvers, Mass. last February; and Southern Connecticut's impending sale to Naugatuck Valley Savings (NVSL) of Naugatuck, Conn., completed last month., among others, according to the August filing. Seidman said in the Abington filing that he would like to meet with Abington's board of directors and management "to review ways to maximize shareholder value," specifically "to discuss the sale of the issuer [Abington] versus the value of the issuer [Abington] as an independent company." Following said meeting, Seidman will then "evaluate the position taken by the Issuer [Abington] to determine his next course of action," the filing said. Seidman is "hopeful that the Board is receptive to an open discussion of all the available options." --Written by Laurie Kulikowski in New York.
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