Bidding War Brings Wall Street Flavor to Cape Cod Scene
Kline, Alan, American Banker
Shortly after announcing plans to acquire Sandwich (Mass.) Bancorp last month, CompassBank president Kevin G. Champagne received a telephone call welcoming him to Cape Cod.
It was from Stephen B. Lawson, president of Cape Cod Bank and Trust Co., Sandwich Bancorp's chief rival. The two-who barely know each other-even talked about getting together for lunch, said Mr. Champagne.
But the budding friendship was short-lived.
Less than three weeks later, on Feb. 17, Cape Cod Bank made an unsolicited $125 million offer for Sandwich, topping CompassBank's bid by $15 million.
Then, within days, two other Massachusetts companies-Firstfed America Bancorp in Fall River and Rockland's Independent Bank Corp.-submitted their their own offers for $519 million-asset Sandwich.
Now, an all-out bidding war has broken out on rustic Cape Cod, with the initial solicitor, New Bedford, Mass.-based CompassBank, going so far as to hire a high-powered New York law firm to keep alive its hopes of acquiring the 112-year-old institution.
"I don't think there's any question that what we're seeing is highly unusual at the community bank level," said Robert Powers, a Providence, R.I., bank consultant.
One suitor, Independent, withdrew its bid late Friday. Officials at the $1.3 billion-asset company would not comment on the decision.
Which of the others will emerge as the new owner of Sandwich is now up to the bank's board of directors.
Senior vice president Dana Briggs said Sandwich's board is considering all offers, but he declined to name a front runner or say when a decision would be made. Asked if remaining independent was an option, Mr. Briggs replied, "The likelihood is small."
Why the sudden interest in Sandwich?
Observers cite a host of reason, the most significant of which is the bank's spot on the map. All the potential acquirers are based in or adjacent to Sandwich's market area.
"Sandwich Co-Op has a very nice franchise and distribution system on Cape Cod," Mr. Powers said. "It fills a place in the market that all of these institutions have an interest in serving."
No matter which offer is accepted, Sandwich shareholders stand to be richly rewarded.
Before CompassBank made its all-cash, $53-per-share offer, Sandwich's stock was trading at about $43. At midday Friday it was trading at $57.75, an asking price analysts still believe would be too low.
"People are fooling themselves if they think the offer is going to stay at $53 a share," said Bernard J. Doherty, senior vice president at Josephthal & Co. …