Hunton & Williams Represents Cascade Bancorp in Topping Bid

Hunton & Williams LLP represented Cascade Bancorp (“Cascade”) in what is believed to be the first successful community bank topping bid in connection with Cascade’s agreement to acquire Home Federal Bancorp, Inc. (“Home Federal”) (Americas M&A Atlas Deal Of The Year- Middle Markets - 2013). Cascade is, and Home Federal was, a NASDAQ–listed company.

Cascade relied on the evolving case law governing board fiduciary duties in connection with proposals that are financially and otherwise superior to an agreement that a selling institution already signed. Specifically, Home Federal was conducting a 30-day “go shop” process under a merger agreement with a third party in which it was allowed to solicit alternative transactions. The frequency of such topping bids is relatively uncommon in public company M&A transactions, especially in the financial services industry.

After receiving Cascade’s bid and negotiating with the initial buyer during a four-day “matching right” period, Home Federal ultimately declared that Cascade had submitted a “superior proposal,” terminated its existing merger agreement, and paid a $2.9 million termination fee to the initial buyer in order to enter into a new merger agreement with Cascade. The Hunton & Williams team worked closely with Cascade’s financial advisor to help Cascade prepare and submit its offer and win the bidding contest in fewer than 30 days.

The Wall Street Journal reported on the transaction as “the latest counter” to the “view that ‘go-shop’ periods are empty exercises” for boards of directors. 

With approximately $2.4 billion in assets, the newly formed company will serve communities across Oregon and Idaho. The transaction consummated on May 16, 2014, after receiving all required regulatory and shareholder approvals.