Two US regional banks sidestep proxy fight with activist investor HoldCo

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Truces with two banks come just weeks after HoldCo pressed for changes

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HoldCo has targeted a number of regional banks in wake of Comerica sale news

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Standoff between HoldCo and Eastern continues

By Svea Herbst-Bayliss

NEW YORK, - Two U.S. regional banks averted boardroom fights with an activist hedge fund on Thursday after it said both lenders made concessions that satisfied its demands, for now.

HoldCo Asset Management, which spent months pushing a handful of banks for strategic changes including halting new acquisitions and possibly considering selling themselves, told First Interstate BancSystem and Columbia Banking System that it will lay down its arms.

"The company is finally pursuing the right path - and if it stays there, we believe the next five years should deliver exceptional shareholder returns," HoldCo portfolio managers Vik Ghei and Misha Zaitzeff wrote to each company using the exact same words, according to separate public presentations.

The truces come as more corporate agitators are flexing their muscle and pushing companies across sectors including yacht retailing, beverage and snacks, consumer health and railroad, to make changes ranging from selling units to replacing top executives.

HoldCo had urged Columbia and First Interstate to swear off new acquisitions and securities restructurings in addition to altering executives' and directors' compensation and to consider a sale eventually.

Columbia's CEO, Clint Stein, told analysts last week: "I have zero interest in M&A for the foreseeable future." First Interstate CEO James Reuter made similar comments on his bank’s earnings call last week, saying it was focused on organic growth and returning cash to shareholders.

Neither executive made firm promises for future actions.

First Interstate declined comment and Columbia did not respond to a request for comment.

Still the executives' public statements on M&A persuaded Ghei and Zaitzeff to abandon threats to nominate directors at the banks’ respective 2026 shareholder meetings, per Thursday’s statements.

The pair said though that they could resume their effort if the boards take actions "inconsistent with our expectations."

Both companies' share prices were down slightly on a day the broader market showed losses.

HoldCo, which has roughly $2.6 billion in assets and specializes in investing in banks, has made a big splash in the normally staid banking sector. By capitalizing on success in calling for a sale at Comerica, HoldCo quickly pivoted to push Columbia, First Interstate and Eastern Bancshares to make considerable changes.

Industry analysts said HoldCo arrived with a broad set of prescriptions for each bank but also said that the firm's theses and ideas were extremely similar at each target.

At Eastern, the standoff continues with HoldCo pushing harder for a deal and executives, including Executive Chairman Robert Rivers, telling the Boston Globe last month that the bank is not for sale.

This article was generated from an automated news agency feed without modifications to text.