This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Acquisition Of VantageSouth Bancshares, Inc. By Yadkin Financial Corporation May Not Be In Shareholders' Best Interests

Stocks in this article: VSBYDKN

SAN DIEGO and RALEIGH, N.C., Jan. 29, 2014 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of VantageSouth Bancshares, Inc. (NYSE-MKT: VSB) by Yadkin Financial Corporation (NASDAQ: YDKN).  On January 27, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which VantageSouth shareholders will receive 0.3125 shares of Yadkin Financial Corporation common stock for each share of VantageSouth common stock, for a total consideration of $5.41 based on the closing price of Yadkin Financial stock on January 24, 2014.

(Logo:  http://photos.prnewswire.com/prnh/20130103/MM36754LOGO)

Is the Proposed Merger Best for VantageSouth and Its Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at VantageSouth is undertaking a fair process to obtain maximum value and adequately compensate VantageSouth shareholders in the merger.

As an initial matter, the $5.41 merger consideration is significantly below the target price of $6.50 set by an analyst at Raymond James on September 23, 2013.  In addition, VantageSouth traded above the offer prices as recently as October 8, 2013, reaching a high of $5.45.  It should also be noted that the premium to shareholders of 5.2% is substantially below the average one day premium of nearly 30% for comparable transactions in the last three years. 

On October 30, 2013, VantageSouth released its earnings for the quarter ended September 30, 2013, which showed improvements in net income and net operating earnings over the same period 2012. For the quarter, VantageSouth reported an increase in net income to $1.5 million compared to $1.3 million for the same quarter 2012, and net operating earnings of $3.0 million compared to $1.4 million for the third quarter 2012. 

In announcing these results, VantageSouth's Chief Executive Officer, Scott Custer, remarked, "We improved operating earnings and achieved annualized net loan growth of 9 percent in the third quarter despite a general environment of economic uncertainty and slowing mortgage activity… Overall, we are pleased with the progress we made on a number of fronts this quarter and believe that we have properly realigned our mortgage business to operate more profitably in the coming quarters."

Given these facts, Robbins Arroyo LLP is examining the VantageSouth board of directors' decision to sell the company to Yadkin Financial now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects. 

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs