By Richard Newman/The Record
November 24, 2011
* Short Hills-based Investors says path cleared for takeover.
Investors Bancorp Inc., which has been expanding rapidly in North Jersey, has sweetened its offer by 7 cents a share in hopes of clearing the way for the Short Hills-based lender's pending acquisition of troubled Brooklyn Federal Bancorp, which is being sued by shareholders and investigated by securities regulators.
Some of the Brooklyn bank's shareholders were unhappy with the original offer of 80 cents a share, or $2.9 million, and they filed two lawsuits in a New York State court in August and September. They contend Brooklyn Federal's directors did not get the best possible price for owners of publicly traded common shares, and therefore, did not fulfill legal responsibilities as fiduciaries. The Brooklyn bank and Investors Bancorp were named as defendants.
But top officials at Investors Bancorp are saying this week that, with the 7-cents-a -share increase, the deal is on track for a January closing.
"It's settled," said Domenick Cama, Investors Bancorp's chief operating officer. "We all signed a memorandum of understanding and we're waiting for the court to approve it."
Brooklyn Federal shareholders will meet Dec. 22 at the Brooklyn Bridge Marriott to vote on whether to approve the modified deal, according to a proxy the Brooklyn bank filed with regulators.
The proxy also said the Securities and Exchange Commission's Enforcement Division on Aug. 11 subpoenaed Brooklyn Federal for information related to its loan-loss provisions, its restatements of financial reports for the first three quarters of 2010 and the "effectiveness of internal controls," among other matters.
An SEC spokesman said the agency does not comment on investigations, and Brooklyn Federal officials could not be reached for comment.
Investors Bancorp agreed this summer to buy the Brooklyn-based bank to add more than $400 million in deposits and five branches in Brooklyn and Long Island.
The bank continues to have designs on North Jersey, and Chief Executive Officer Kevin Cummings has said he is looking for opportunities to open more branches in southern Bergen County, in the Route 80 corridor.