The former chairman and chief executive of Bank of Hawaii is stepping up a bid for Honolulu’s Territorial Savings Bank, seeking to upend a pending merger with Los Angeles-based Hope Bancorp Inc. by convincing shareholders to vote against the deal next month.

Territorial management is holding firm, meanwhile, saying the proposal by Allan Landon’s Blue Hill Advisers is not as good as it seems. 

Landon, who was Bank of Hawaii’s chief executive from 2004 to 2010, is promising a premium over the deal proposed by Hope. On Thursday, Landon’s Blue Hill upped its cash bid to $12.50 per share from $12, and calculated it represented a 27% premium over the value of the stock swap offered by Hope, which amounts to $9.87 per share. Territorial shares closed Thursday at $10.36.

“This increase makes our offer even more attractive,” Landon said in a news release. The release included a link to a new website Blue Hill has set up “to keep stakeholders informed” and a 29-page presentation outlining Blue Hill’s pitch to investors.

“Shareholders recognize the superiority of our offer and want Territorial to engage with us,” Blue Hill managing member Jason Blumberg added in the news release. He did not respond to a request for comment.

Blue Hill’s campaign to upend Hope’s takeover includes asking shareholders who have voted for the deal to change their votes, and it offers instructions on how to do so.

“Shareholders who have already voted FOR the Hope merger but who wish to change their vote can still do so before the October 10 special meeting of Territorial stockholders by following the instructions for changing votes as described in the prospectus that Hope filed with the U.S. Securities and Exchange Commission on August 22, 2024,” Blue Hill says in Thursday’s press release.

‘Highly Speculative’

But Territorial’s board is staying committed to the Hope deal, which was announced in April.

“The unsolicited letter from Blue Hill claims to provide a nominally higher purchase price, but there are significant factors making the proposal highly uncertain and inferior to the merger agreed upon with Hope,” Allan Kitagawa, Territorial’s chairman, chief executive and president said in a statement. “The Territorial Board carefully considered the proposal on two separate occasions, and after weighing the advice of independent legal and financial advisors, the Board rejected the proposal. 

“In comparison to the Hope merger, where we have an experienced acquiror and a fully negotiated merger agreement, and where all required regulatory applications have been made and are being processed, and no third-party financing is required, the Blue Hill proposal is highly speculative,” Kitagawa added.

Headquartered in Los Angeles, Hope “has been providing financial services to the largest Korean American community in the country for more than 40 years and is today one of the leading Asian American banks in the United States,” its website says. 

It operates operates 48 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Alabama, and Georgia. 

According to its website, Territorial was founded in 1921 as the Kaimuki Building & Loan Association. It has $2.0 billion in assets and 29 branches on Oahu, Maui, Kauai and Hawaii.