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A stalemate over pricing in early February initially thwarted Rockland Trust’s attempt to acquire East Boston Savings Bank before talks resumed a few weeks later, according to a new SEC filing.

The idea to acquire East Boston Savings Bank was raised by investment banking firm Raymond James during an early January board meeting of Rockland Trust’s parent company, Independent Bank Corp., according to a preliminary proxy statement filed with the SEC.

A year earlier, representatives from Raymond James had attended a board meeting for East Boston Savings Bank’s parent company, Meridian Bancorp. The investment bankers had provided an overview of the market for mergers and acquisitions during that meeting. But with the pandemic starting soon after, the board spent the remainder of 2020 focused on East Boston Savings Bank’s operations, the filing said.

After meeting in January 2021 with Independent’s board, a representative from Raymond James provided a summary of the discussion to East Boston Savings Bank’s president and CEO, Richard J. Gavegnano, who shared the information with the executive committee of Meridian’s board on Jan. 14.

Rockland Trust has been active in M&A for the past decade, and Gavegnano was one of several bank leaders who had informal discussions about acquisitions with Rockland Trust’s CEO, Christopher Oddleifson, over the years, according to the filing.

A representative from Raymond James spoke with Oddleifson on Jan. 22 about whether Rockland Trust would be interested in talking about a deal for East Boston Savings Bank. According to the filing, Oddleifson said that “Independent may be interested but had other ongoing potential projects that it was currently focused on.”

Over the next few days, though, Oddleifson and Rockland Trust’s senior management discussed the strategic and financial benefits of the deal and decided to talk with East Boston Savings Bank about a potential deal.

Rockland Trust proposed a price for acquiring East Boston Savings on Jan. 29. It was based on a range of exchange ratios of Independent common stock for each share of Meridian common stock of 0.2735 to 0.275. According to the filing, this implied a pricing range between $20.91 and $21.03, based upon the previous day’s closing price of Independent’s stock.

After Raymond James gave this information to Gavegnano, he provided it to Meridian’s board. The price was not accepted.

“Representatives of Raymond James indicated to Independent that the proposed pricing range was inadequate and discussions were discontinued on February 2, 2021 after Independent indicated it was unwilling to increase the proposed pricing range,” the filing said.

Three weeks later, though, Independent’s financial advisor, Keefe Bruyere and Woods, contacted Raymond James about possibly resuming merger discussions. The upper end of the original price range was offered, a fixed exchange ratio of 0.275 shares of Independent common stock for each share of Meridian common stock, but this time representing an implied price of $24.21 per share based on the then-current market price for Independent’s stock.

Rockland Trust also wanted exclusive negotiating rights with East Boston Savings Bank through April 30.

The two banks entered into a non-binding indication of interest, mutual exclusivity agreement and mutual nondisclosure agreement on March 4, and the deal valued at $1.15 billion was announced on April 22.

During the same time frame, Century Bank was considering acquisition offers from two banks, before announcing a deal on April 7 with Eastern Bank.

Proxy: East Boston Savings Initially Rejected Rockland Trust

by Diane McLaughlin time to read: 2 min