The board of directors of John Hanson Savings and Loan of Beltsville yesterday unanimously rejected a sweetened offer to be acquired for $36 million, or $15 a share, in cash by Baltimore Bancorp, a Maryland bank holding company.
Baltimore had increased its bid for Hanson by $3 a share late Monday, just 72 hours after its first offer of $12 a share, or $28.8 million, got a blunt rejection from Hanson's board. Baltimore's revised proposal would have given shareholders more than double the maximum per-share price of $7 that Hanson has said it expects in a pending initial public offering of its stock.
If Baltimore were to acquire Hanson, the banking holding company would get the S&L's $600 million in assets and 23 branch offices in eastern and southern Maryland. Baltimore, whose primary holdings are the Bank of Baltimore and the Municipal Savings and Loan Association, has assets of $2.1 billion and 20 branch offices in Maryland.
"I believe this offer is in the best interest of the stockholders of Baltimore Bancorp and John Hanson," said Harry Robinson, president of Baltimore. "The offer places a very substantial premium . . . on the stock of John Hanson." But Hanson's management didn't see it that way. "Our directors and many of our shareholders have made clear to us that they hold their shares as long-term investments in John Hanson," said Hanson's chairman and chief executive, Charles A. Dukes Jr. "No purpose would be served by pursuing merger negotiations, and Hanson intends to proceed vigorously with its upcoming offering," Dukes said.
Hanson officers, directors and general counsel own 56.8 percent of the S&L.
Baltimore officials said the bank holding company is eligible to buy Hanson only because the thrift holds $11.3 million in state-issued notes that it needed to boost its assets and meet regulatory requirements for federal deposit insurance. Federal law bars banks from owning thrifts under normal circumstances. But under a special exception allowed by a 1982 federal law, the Maryland notes qualify Hanson as a financially troubled institution and thus make it eligible for purchase by a bank holding company, the Baltimore officials said.
Baltimore's new offer, like the original $12-a-share offer that it made last week, is good only if Hanson withdraws its planned public offering, Baltimore executives said. Once Hanson makes the stock offer and raises enough money to retire the Maryland-backed notes, the S&L will return to a healthy status and no longer be available for purchase by an entity outside the thrift industry, Baltimore officials said.
On Feb. 11, Hanson issued a preliminary circular on the pending offering that said the S&L's stock was expected to sell in the range of $6 to $7 a share. A final circular will be published before Hanson's stock goes on sale, which is expected in a few weeks.