United Financial Bancorp, Inc. and Rockville Financial, Inc. Merger May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP are investigating the proposed acquisition of United Financial Bancorp, Inc. (NASDAQ:UBNK) by Rockville Financial. United and Rockville announced the signing of a definitive merger agreement pursuant to which Rockville will acquire United. Under the terms of the agreement, holders of United will receive 1.3472 shares of Rockville common stock for each share of United common stock, or $18.35 per share based on Rockville’s closing price of $13.62 on November 14, 2013 and the 1.3472 conversion rate.
Is the Merger Best for United and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at United is undertaking a fair process to obtain maximum value and adequately compensate United shareholders in the merger. As an initial matter, the $18.35 consideration represents a premium of only 14.4% based on United’s closing price on November 14, 2013. This premium is substantially below the average one-day premium of 52.99% for comparable transactions in the last three years. Further, United is currently experiencing success and growth in its business prospects, as indicated in its October 17, 2013 press release announcing the company’s financial results for its third quarter 2013. In particular, United reported:
- net income of $4.6 million for the quarter, compared to $2.9 million for the same quarter 2012;
- net income of $13.4 million for the nine months ended September 30, 2013, compared to $8.4 million for the same period 2012 and;
- an increase in total loans of $77.4 million, or 4%.
In announcing these results, United’s President and Chief Executive Officer, Richard B. Collins, stated, “We are pleased with our improved performance this quarter. Asset quality remained strong and compares favorably to industry averages and those of our peers. Our balance sheet remains very healthy with solid capital and liquidity positions.”
Given these facts, Robbins Arroyo LLP is examining the United board of directors’ decision to sell the company to Rockville now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects, and whether they are seeking to benefit themselves.
United shareholders have the option to file a class action lawsuit to secure the best possible price for shareholders and the disclosure of material information so shareholders can tender their shares in an informed manner.
United shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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