Berkshire Hills reaches truce with activist investor

Berkshire Hills Bancorp in Boston has resolved a dispute with an activist investor.

The $12.9 billion-asset Berkshire said in a press release Monday that it will add two nominees from HoldCo Asset Management to its board.

HoldCo, a New York company that owns 3.3% of Berkshire's outstanding stock, had recently expressed disappointment that the company opted to hire a new CEO rather that look to sell itself.

Berkshire, which reported a $533 million loss in 2020 that reflected a large goodwill impairment tied to past acquisitions, announced in January that it had hired Nitin Mhatre, a former Webster Bank executive, as its next leader. Mhatre is Berkshire’s third CEO in three years.

HoldCo co-founders Vik Ghei and Michael Zaitzeff had also been pushing Berkshire’s board to improve its oversight of management and authorize a new share repurchase program.

Berkshire, as part of the deal struck with HoldCo, will add Zaitzeff and another individual to be nominated with the investor’s consent to its board. The nominees, along with 11 current directors, will stand for election at Berkshire’s 2021 annual meeting, which will be held on May 20.

“We are pleased to have reached this agreement with HoldCo,” Berkshire Hills Chairman Williar Dunlaevy said in the release. “This agreement underscores our commitment to listening to and incorporating the views of our investors.”

“We appreciate the constructive dialogue we have had with Berkshire throughout this process and believe that today’s agreement is an important step in improving the ompany’s performance and strengthening shareholder alignment for the benefit of all shareholders,” Zaitzeff said.

As part of the agreement, HoldCo backed off a plan to nominate six candidates for Berkshire’s board. The investor agreed to support Berkshire’s nominees and to refrain from making any disparaging comments about the company for at least a year.