Activist fund Align Partners Asset Management said it was "very disappointed" that BNK Financial Group(138930) and JB Financial Group(175330) both rejected the request to review the feasibility of a merger, adding it "plans to request access to the minutes of both boards of directors."
On the 28th, Align Partners issued a statement, saying it "is very disappointed that they refused even to conduct an independent and professional review of the strategic and financial feasibility of a merger between regional financial holding companies," and stated accordingly.
Align Partners said, "What is most disappointing is that the disclosures by the two companies presented only the conclusion, without explaining the reasons for the decision or any alternatives," adding it "will immediately request access to the minutes of both boards of directors."
It said that after closely reviewing the minutes, it plans to check what information and discussions the boards relied on to reach this decision and to review response options going forward.
Align Partners explained, "We did not propose that the two companies push ahead with a merger immediately," saying it made the proposal because it judged that, as a strategic alternative to overcome the structural crisis facing regional banks, it is an option worthy of thorough review.
It added that it is asking for "an independent and professional review of the strategic and financial feasibility of a merger between regional financial holding companies."
Align Partners said, "The board is an institution that must continuously deliberate and discuss the company's long-term growth strategy and major strategic tasks," adding, "Simply presenting conclusions such as 'not appropriate at this time' or 'decided not to review' makes it hard for major shareholders and the market to accept."
It also noted that the board has a responsibility to explain to shareholders how it assesses the structural crisis facing regional banks, what the long-term strategy is in response, and what strategic alternatives are better than those proposed by Align Partners.
Align Partners said, "We believe this proposal has initiated long-term strategic discussions on the structural crisis facing regional finance," adding it "plans to provide additional views if necessary after a detailed review of the minutes."
Meanwhile, earlier the same day, BNK Financial Group and JB Financial Group each said in disclosures that, as a result of discussions on whether to begin a feasibility review of a merger, they decided not to proceed with a review.