Heritage Financial Group Inc.
Acquisition of Heritage Financial Group, Inc. (HBOS) by Renasant Corporation (RNST) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP are investigating the proposed acquisition of Heritage Financial Group, Inc. (NASDAQ: HBOS) by Renasant Corporation (NASDAQ: RNST). On December 10, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which Renasant Corp. will acquire Heritage Financial. Under the terms of the agreement, Heritage Financial shareholders will receive 0.9266 shares of Renasant common stock for each share of Heritage Financial common stock, for a consideration of $26.61.
Is the Proposed Acquisition Best for Heritage Financial and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Heritage Financial is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $26.61 merger consideration represents a premium of only 23% based on Heritage Financial’s closing price on December 10, 2014. This premium is significantly below the average one-month premium of 39% for comparable transactions within the past 5 years.
On October 29, 2014, Heritage Financial released its earnings results for its third quarter 2014, reporting strong quarterly earnings. In particular, the company reported net income of $2.0 million or $0.26 per diluted share, up 11% from $1.8 million or $0.23 per diluted share for the linked quarter, and up 48% from $1.3 million or $0.18 per diluted share for the year-earlier quarter. Further, on September 30, 2014, Heritage Financial saw the successful completion of the company’s first open-bank acquisition, Alarion Financial Services, Inc. and its subsidiary Alarion Bank. Also, Heritage Financial beat consensus analyst estimates for sales in three of its past four quarters.
In commenting on these results, Heritage Financial President and Chief Executive Officer Leonard Dorminey remarked, “Results for this past quarter reflected significant progress in the growth of our business and the execution of our expansion strategies – most notably with the completion of the Alarion acquisition, which facilitated our entry into the Gainesville, Florida market.… All aspects of our operations continue to perform well, as indicated by ongoing organic loan growth and continued momentum in loan production across most of our markets, which keeps us on pace for another year of double-digit growth. This progress, coupled with further improvements in credit quality measures, has greatly strengthened our banking operations.”
In light of these facts, Robbins Arroyo LLP is examining Heritage Financial’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Heritage Financial shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Heritage Financial 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.