The most specific details I could find were on the BANR company website, in a slide presentation. It states that the premium being offered over HOME share price is 5.9%. This is obviously pathetically low, especially as HOME is selling for only book value now. The premium should be at least 25%. The dollar value of the buyout is $13.40 per share as of 2 days ago, and this is a mixture of cash and BANR shares. The details of how much of each would be exchanged for a HOME share is not specified. The absence of specific details is unusual and it smells bad.
BANR share price now seems fully valued (as compared to HOME share price which is undervalued). BANR share price has also fallen since the offer.
Now that HOME shares have fallen to the same level they were pre-announcement, Mr. Market says this deal will not go through. I'm certainly going to vote my shares against the deal as stated. Even an all cash offer at $13.40 is silly. The minimum that can be considered is $16.50 in a mixture of BANR stock and cash. For cash alone a minimum can be $15.25.
I was a stockholder of a mutual insurance company (i.e., the policy owners also had ownership) that agreed to a buyout with a 90% premium. The lawyers piled on this as the policy owners were not going to receive any dollars from the buyout, and for various other reasons. Similar lawyer pile as here. The lawsuits got nothing, and I received buyout cash with the huge premium. This situation however is quite different, as this deal does not benefit the actual owners of the bank (i.e., the stockholders). Insiders own 12% of HOME while institutions and funds own 70+%. Where we go from here is up to how the big holders vote their shares. Because many names for the big holders are not so famous, they may be small enough to actually pay attention and vote against this blunder or at least force a better buyout price.
After reading the news for HOME and the lone other comment on this board, do I count six law firms looking at this transaction on behalf of the shareholders? I have never seen them pile on for such a small transaction.
Like you, my thought was that the price was too low. But if you look at overall trends, I don't see many things heading in the right direction for this bank. Sure, they are not bleeding bad loans any more, but they are nearing the end of loss share for their first acquisition and the second one is not far behind. Assets are down, income is down and they have not really made any big moves since the Liberty purchase.
Maybe I am being a bit harsh but I see this as something of a vote of no confidence by the HOME board against management. More of a thought of "let's cut our losses now before it gets worse" action. I could be wrong, though.