Rangeley Capital LLC, a shareholder of First United Corp., is also calling for the sale of the Oakland, Md.-based community bank.
Activist U.S. bank investor Driver Management Co. LLC recently renewed its call for the bank to sell.
Rangeley Capital believes the company could be sold for about $30 per share, which would represent a sizable premium from the Sept. 30 closing price of $22 per share. Based on the outstanding shares as of July 31, S&P Global Market Intelligence calculates the deal value at $213.2 million.
The investor also criticized the board for not exploring a sale of the company yet, adding that "testing the waters" will not do any harm considering deal speculations already exist.
"To make matters worse, you now appear to be burying your heads in the sand in hopes that shareholders’ enthusiasm for a sale will fade," Rangeley Capital said in a letter to Chairman, President and CEO Carissa Rodeheaver. "As I articulated in my recent communication with you, I was alarmed to see the company plan a 'distracting and costly public campaign' to thwart an investor requesting the Board consider a path to unlock a significant undervaluation of the shares."
First United criticized Driver's renewed bid, saying the activist investor is launching a "distracting and costly public campaign." Driver recently said it would nominate three directors to the bank's board at the next annual meeting if ever the board "continues prioritizing self-preservation over shareholder value."
Rangeley Capital also called First United's board to release its plan on how it will deliver shareholder value as a stand-alone company together with a commitment to run a sale process.
"Please also avoid spending a penny of shareholders’ capital on external legal and financial advisers if they are employed to simply dispute calls for a sale," the investor concluded.
First United did not immediately respond to S&P Global Market Intelligence's request for comments.
