HoldCo challenges Boston Financial Holdings Decision To Sell Itself To SVB Financial for $900m

(Reuters) – Investment firm HoldCo Asset Management is challenging Boston Private Financial Holdings Inc’s board over its decision to sell itself to SVB Financial for $900 million, according to two people familiar with the matter.

HoldCo, a 10-year old New York-based investment firm that owns roughly 4.9% of Boston Private, is expressing its concern over the bank’s proposed sale by nominating five directors to its eight-member board, the sources said.

The investment firm is concerned that the sale process was not transparent enough, that the proposed price was too low and that the current board, which it blames for the bank’s underperformance, would not achieve the best outcome for shareholders, the sources said.

Boston Private did not immediately respond to a request for comment.

HoldCo began buying Boston Private shares when they traded around $6 in August, before the cash-and-stock deal with SVB was announced in early January. The shares ended trading at $13.33 on Tuesday, slightly above the implied deal price of $13.09, indicating that investors expect a better deal.

For the sale to SVB to go forward, two-thirds of Boston Private shareholders will have to vote in favor of it. The two companies said they expect the deal to close by the middle of 2021 and have not set a date for a vote on the merger.

Boston Private has also not set a date for its annual meeting, presumably its last if it is sold this year.

HoldCo co-founders Vik Ghei and Michael Zaitzeff are among the board candidates that HoldCo has put forward, the sources said. The other candidates have financial services and real estate experience, the sources added.

Ghei and Zaitzeff have launched three funds, including HoldCo Fund III, which has invested in bank stocks and delivered an internal rate of return of 93%, a person familiar with the gain said.

(Reporting by Svea Herbst-Bayliss in Boston; Editing by Cynthia Osterman)

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