Paramus, N.J.-based Hudson City Bancorp Inc. has been acquired by Buffalo, N.Y.-based M&T Bank Corp. in a $3.7 billion transaction. However, a Los Angeles law firm has raised concerns over the nature of the acquisition.
In a press announcement, the companies say that Hudson City will ‘merge into a subsidiary of M&T’ while M&T will ‘acquire Hudson City's network of 135 branch offices in New Jersey, downstate New York and Fairfield County, Conn.’ M&T expects to gain approximately $25 billion in deposits and $28 billion in loans from the transaction.
‘This merger creates tremendous opportunities to build on the successes that each company has achieved individually in its own markets,’ says Hudson City Chairman and CEO Ronald E. Hermance Jr. ‘Hudson City recently embarked on a diversification of our product lines and our balance sheet. This transaction accelerates that transformation. As we combine Hudson City's attractive retail network with M&T's full service commercial banking suite, our stakeholders will participate in the growth of one of the nation's strongest and most successful banking franchises.’
Following the announcement, the Los Angeles law firm Glancy Binkow & Goldberg LLP issued a statement that it was ‘investigating potential claims against the board of directors of Hudson City Bancorp Inc.’
‘This investigation concerns whether the board of directors of Hudson breached their fiduciary duties to stockholders by failing to adequately shop the company before agreeing to enter into the proposed transaction, and whether the company has disclosed all material information to shareholders about the transaction,’ says the law firm. ‘The company has seen substantial recent growth. Its share price has skyrocketed from $5.09 on Nov. 23, 2011, to $7.54 on March 20, 2012. Further, at least one analyst has set a target price for the company's stock at $7.50.’
M&T and Hudson City did not publicly comment on the law firm's statement.