Two US regional banks sidestep proxy fight with activist investor HoldCo
The truce with the two banks comes just weeks after HoldCo pressed for change
HoldCo targets a number of regional banks following Comerica sale news
The conflict between HoldCo and Eastern continues
NEW YORK – Two US regional banks avoided boardroom fights with an activist hedge fund on Thursday after both lenders said they had made concessions that met their demands for now.
HoldCo Asset Management, which for months has been pushing a handful of banks to make strategic changes, including halting new acquisitions and possibly considering selling themselves, said it would lay down its arms on First Interstate BancSystem and Columbia Banking System.
HoldCo portfolio managers Vik Ghei and Misha Zaitzeff wrote to each company, using the same words, according to separate public presentations: “The company is finally on the right track – and if it stays on that path, we believe the next five years will deliver outstanding shareholder returns.”
The ceasefires come as more corporate agitators flex their muscles and force companies in sectors such as yacht retailing, drinks and snacks, consumer healthcare and railways to make changes ranging from selling units to replacing senior executives.
HoldCo had called on Columbia and First Interstate to forgo new acquisitions and securities restructurings, as well as adjust executive and director salaries, and eventually consider a sale.
Columbia’s CEO Clint Stein told analysts last week: “I have zero interest in mergers and acquisitions for the foreseeable future.” First Interstate CEO James Reuter made similar comments on his bank’s earnings release last week, saying it was focused on organic growth and returning cash to shareholders.
Neither executive made firm promises regarding future actions.
First Interstate declined to comment and Columbia did not respond to a request for comment.
Executives’ public statements about mergers and acquisitions persuaded Ghei and Zaitzeff to drop their threats to nominate executives at the banks’ respective 2026 shareholder meetings, according to Thursday’s disclosures.
The two said they could continue their efforts if boards took actions “inconsistent with our expectations.”
Share prices of both companies fell slightly on a day when the overall market showed losses.
HoldCo, which has about $2.6 billion in assets and specializes in investing in banks, has made a big splash in the otherwise stable banking industry. Leveraging the success of making a sales call on Comerica, HoldCo moved quickly to force Columbia, First Interstate, and Eastern Bancshares to make significant changes.
Industry analysts said HoldCo comes with a broad set of prescriptions for each bank, but also that the firm’s theses and ideas are extremely similar across each target.
The standoff continues at Eastern, with HoldCo pushing harder for a deal and executives including Chief Executive Robert Rivers telling the Boston Globe last month that the bank is not for sale.
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