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Investing.com -- Eastern Bankshares (NASDAQ:EBC) stock rose 5% Friday as regional banks recovered from Thursday’s selloff and after reports emerged that activist investor HoldCo Asset Management is pushing for the Boston-based financial institution to sell itself.
According to Reuters, HoldCo has built a 3% stake in Eastern Bankshares in recent months and is advocating for a sale of the company, potentially to larger regional competitor M&T Bank (NYSE:MTB). The activist investor is critical of Eastern’s capital allocation strategy, including three acquisitions made within five years and multiple securities restructurings.
HoldCo reportedly argues that these acquisitions consumed nearly all of the excess capital Eastern received when it converted from a mutual bank to a publicly traded company in 2020, when it raised $1.8 billion through its initial public offering.
The activist investor has specifically targeted former CEO and board chairman Robert Rivers and other directors for what it considers mismanagement, claiming they pursued acquisitions despite limited expertise in bank mergers and acquisitions.
Eastern Bankshares, founded in 1818, has been operating as a public company since its 2020 IPO. The stock’s rise on Friday came as part of a broader recovery in regional banking shares following a sector-wide decline the previous day.
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