ISS Recommends Against Territorial-Hope Merger: Implications and Counterarguments

In a recent development, Institutional Shareholder Services (ISS) has recommended that Territorial Bancorp shareholders vote against the proposed merger with Hope Bancorp. This recommendation, based on several concerns regarding the merger terms and conditions, has significant implications for the voting behavior of shareholders and the regulatory review process. This article explores the reasons behind ISS's recommendation, its potential impact on the merger's fate, and the counterarguments that Hope Bancorp could present to sway shareholder opinion.

ISS raised specific concerns regarding the proposed merger terms and conditions, including the lack of a breakup fee, the absence of a go-shop provision, and the potential for a lower offer from another bidder. These concerns highlight the need for more protective measures for Territorial shareholders in case the merger with Hope Bancorp does not materialize.


The ISS recommendation is likely to influence the voting behavior of Territorial's institutional shareholders, who often rely on ISS's analysis when making voting decisions. However, the impact on individual shareholders may vary, as they might be more swayed by the potential benefits of the merger, such as enhanced resources and an expanded product range.

Key concerns raised by ISS that could sway Territorial's individual shareholders include the uncertainty surrounding the merger's completion, the potential for a lower offer from another bidder, and the lack of protective measures for shareholders. Hope Bancorp could address these concerns by presenting a more compelling case for the merger's benefits and offering additional protective measures, such as a breakup fee or a go-shop provision.


To change the ISS recommendation, Hope Bancorp and Territorial Bancorp could take several steps. They could address the concerns raised by ISS by offering more protective measures for shareholders, such as a breakup fee or a go-shop provision. Additionally, they could emphasize the strategic benefits of the merger, such as the expansion of their combined footprint and the diversification of their loan mix. By doing so, they could potentially sway ISS's opinion and increase the likelihood of Territorial shareholders voting in favor of the merger.

In conclusion, the ISS recommendation against the Territorial-Hope merger has significant implications for the voting behavior of shareholders and the regulatory review process. By addressing the concerns raised by ISS and presenting a more compelling case for the merger, Hope Bancorp could potentially change the recommendation and increase the likelihood of the merger's success. The outcome of this situation will have important ramifications for both companies and the broader banking industry.