Shareholder amplifies concerns about sale price in Boston Private deal

A prominent shareholder in Boston Private Financial Holdings on Wednesday stepped up its criticism of the terms of the company’s deal to be sold to SVB Financial Group.

HoldCo Asset Management said the $900 million sale price “substantially undervalues” Boston Private. Vik Ghei and Michael Zaitzeff, co-founders of the investment fund, said in a statement that they still backed a sale. But they signaled their intention to ensure the process is “carried out with integrity and appropriate oversight.”

HoldCo said it submitted a notice of its intention to nominate up to five candidates for election to the Boston Private board at its upcoming annual meeting.

Ghei and Zaitzeff are concerned that Boston Private did not pursue alternative bids and therefore has not secured a fair price.

HoldCo said in a release that, based on publicly available information, it believes the terms of nine directors currently serving on the Boston Private board will expire at the company’s annual meeting.

Boston Private did not immediately respond to requests for comment.

In an interview after the deal was announced, SVB President and CEO Greg Becker characterized the deal price as fair, though he declined to specify whether the price was the result of a bidding process or strictly negotiations. He said conversations about the deal began in early 2020 and accelerated later in the year.

The $9.7 billion-asset Boston Private agreed earlier this month to be sold to the $97 billion-asset SVB for a price that represented a 120% premium to Boston Private’s tangible book value. The premium, however, was among the lowest for a selling bank with assets of $5 billion to $15 billion in the past two years, based on data compiled by Keefe, Bruyette & Woods.

In a letter this month to Boston Private, HoldCo’s founders said the sale price “is grossly too low,” given Boston Private’s position in attractive markets on both coasts, including Boston and San Francisco. Referring to a deal announcement call with analysts, they added, “Our primary concern is that, based on comments made on the call and our review of the transaction metrics, it does not appear” Boston Private “conducted a competitive process to maximize value for shareholders.”

HoldCo’s director nominees include: Ghei and Zaitzeff, along with Laurie Shahon, president of Wilton Capital Group; Jeita Deng, associate dean and chief financial officer of the Harvard Kennedy School of Government; and Merrie Frankel, president of Minerva Realty Consultants.