Brothers Patrick and Ross Little had to be smiling Monday morning. Their combined take on the Teche Federal/IberiaBank deal is a whopping $30 million — and that's just the stock portion.
|Teche Federal's Patrick Little|
As part of the buyout, valued at an estimated $161 million, shareholders of Teche will receive 1.162 shares of IberiaBank common stock for each share of outstanding Teche common stock. Based on IberiaBank’s Jan. 10 closing stock price of $62.10, that translates into a 32 percent increase over Teche’s Jan. 10 closing stock price of $54.40.
Teche’s top execs, Chairman, President and CEO Patrick Little and Executive Vice President Ross Little Jr., according to IberiaBank CEO and President Daryl Byrd, will be retained only temporarily following the deal’s finalization, which is expected in the second quarter. During a press conference at IberiaBank’s headquarters in Downtown Lafayette early Monday afternoon, Byrd commented, albeit vaguely, on what they’ll take away from the deal: “The Littles are going to be doing extremely well through the transaction ... They had a good morning.”
He’s right. According to Teche’s annual shareholder report and proxy statement filed in December, Patrick Little’s cut, based on his 256,209 shares of common stock, will equal a payout of $18.49 million, and that doesn’t take into account any additional incentives or severance compensation included in the deal with IberiaBank. For Ross Little Jr., who holds 157,443 shares of Teche’s common stock, the buyout — also excluding any additional compensation offered by IberiaBank — will earn him $11.36 million.
“I think [Teche] is just acting in the best interest of its shareholders,” says Peter Ricchiuti, assistant dean at the the A.B. Freeman School of Business at Tulane University and founder of the Burkenroad Reports, which tracks both companies' stocks. “The buyout price is a 35 percent premium to the stock’s close on Friday. It’s 50 percent above where the stock traded last month and more than double the share price last summer. Acquiring companies pay a premium on the shares to gain control of the stock, and I think the doubling of Teche’s share price in the last six months seems very attractive to Teche shareholders.”
|Teche Federal's Ross Little Jr.|
Other Teche execs are cashing in, too. Chief Financial Officer J.L. Chauvin's stock will be valued at almost $4 million, and board member Thomas Kramer's take is $3.2 million.
Though many of Teche’s 256 full-time employees may no longer have a job as a result of the buyout — an exact number has not been released — those who own stock will fare well in the transaction.
Teche employees hold 261,586 shares of the company’s common stock, which under the terms of the deal, is valued at about $18.88 million.
The Advocate reported Tuesday that, according to an IberiaBank SEC filing, Teche will provide a federal Worker Adjustment and Retraining Notification Act notice for any employee terminations or layoffs after the deal is completed — if IberiaBank makes a written request.
Under the act, an employer must provide 60-day notice of a mass layoff, or one involving at least one-third of the company’s workers.