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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Check the appropriate box:
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
RIDGEWOOD FINANCIAL, INC.
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(Name of Registrant as Specified in Its Charter)
BOILING SPRINGS BANCORP
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
N/A
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(4) Proposed maximum aggregate value of transaction: N/A
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(5) Total fee paid: N/A
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[ ] Fee paid previously with preliminary materials: N/A
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid: N/A
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(2) Form, Schedule or Registration Statement No.: N/A
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(3) Filing Party: N/A
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(4) Date Filed: N/A
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BOILING SPRINGS BANCORP PROPOSES MERGER WITH RIDGEWOOD FINANCIAL, MHC,
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RIDGEWOOD FINANCIAL, INC. AND RIDGEWOOD SAVINGS BANK OF NEW JERSEY
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FOR IMMEDIATE RELEASE: CONTACT: EDWARD C. GIBNEY
PRESIDENT AND CEO
(201) 939-5000
RUTHERFORD, NEW JERSEY (September 21, 2000). Boiling Springs Bancorp, a mid-tier
mutual holding company and the parent company of Boiling Springs Savings Bank, a
New Jersey state-chartered savings bank, announced that Boiling Springs, MHC,
Boiling Springs Bancorp and Boiling Springs Savings Bank delivered today a
proposal to Ridgewood Financial, MHC, Ridgewood Financial, Inc. and Ridgewood
Savings Bank of New Jersey to initiate merger discussions. On August 28, 2000,
Ridgewood entered into a merger agreement with Provident Savings Bank.
Pursuant to Boiling Springs' proposal, Boiling Springs would merge Ridgewood
Financial, a mid-tier mutual holding company, with and into Boiling Springs
Bancorp, with Ridgewood Savings Bank of New Jersey becoming either a subsidiary
of Boiling Springs Bancorp or a division of Boiling Springs Savings Bank. Each
share of Ridgewood Financial common stock held by the minority shareholders of
Ridgewood Financial would be exchanged for $18.00 in cash as opposed to $15.00
per share offered by Provident. The Boiling Springs' proposal is subject to,
among other conditions, due diligence procedures and the execution of a
definitive agreement between the parties. The deal value would amount to
approximately $26.9 million.
Attached is the correspondence that was delivered to the Boards of Directors of
Ridgewood Financial, MHC, Ridgewood Financial, Inc. and Ridgewood Savings Bank.
We are aware that Ridgewood Financial, MHC ("Ridgewood, MHC"),
Ridgewood Financial, Inc. ("Ridgewood Financial") and Ridgewood Savings Bank of
New Jersey ("Ridgewood Savings") (the three Ridgewood entities sometimes being
collectively referred to as "Ridgewood") have entered into an agreement and plan
of merger with Provident Savings Bank ("Provident"), pursuant to which, among
other things, Ridgewood Savings would merge with Provident and Provident would
acquire each of the outstanding shares of common stock of Ridgewood Financial
held by Ridgewood Financial's minority shareholders for $15.00 in cash. In view
of that merger agreement, Boiling Springs Bancorp ("Boiling Springs") hereby
proposes to merge Ridgewood Financial with Boiling Springs with Ridgewood
Savings Bank becoming either a subsidiary of Boiling Springs or a division of
Boiling Springs Savings Bank ("Boiling Springs Savings"), according to the terms
outlined below. The terms of our proposal are superior to the terms agreed to
between Ridgewood and Provident as contained in the August 28, 2000 merger
agreement filed by Ridgewood Financial with the Securities and Exchange
Commission on August 29, 2000 ("Provident Agreement"). In particular, as part of
our proposed merger, Ridgewood Financial's minority shareholders would receive
$18.00 in cash for each share of Ridgewood Financial common
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stock they hold. Further, the interests of the depositors of Ridgewood Savings
in Ridgewood Financial would be converted into interests of the same nature in
Boiling Springs, MHC.
SUMMARY OF BOILING SPRINGS' PROPOSAL
Our proposed merger with Ridgewood would be completed under the
following terms and conditions. The purpose of our describing these provisions
is to reflect our commitment to enter into an agreement, the terms of which will
be superior to the terms of the Provident Agreement.
1. Summary of Transaction. Subject to any applicable regulatory or
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legal approvals, the result of the proposed transaction would be to merge
Ridgewood Financial with Boiling Springs with Ridgewood Savings becoming either
a subsidiary of Boiling Springs or a division of Boiling Springs Savings. As
part of the merger, the outstanding shares of Ridgewood Financial stock held by
Ridgewood Financial's minority shareholders would be exchanged for $18.00 in
cash per share. Boiling Springs would also pay for any "dissenters' shares" in
accordance with New Jersey law.
2. Consideration. Each share of common stock of Ridgewood Financial held
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by minority shareholders would be exchanged for $18.00 in cash. It is our
understanding that there are currently outstanding 3,180,000 shares of Ridgewood
Financial common stock, of which 1,685,400 shares are owned by Ridgewood, MHC.
It is also our understanding that there do not exist any options to purchase
additional shares of Ridgewood Financial common stock. Accordingly, the total
purchase price (exclusive of shares held by Ridgewood, MHC) would be
approximately $26.9 million.
3. Effect on Depositors of Ridgewood Savings. The interests of the
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depositors of Ridgewood Savings in Ridgewood, MHC will be converted into
interests of the same nature in Boiling Springs, MHC. As a result, each holder
of a deposit account at Ridgewood Savings shall become a holder of a deposit
account at Boiling Springs Savings at the effective time of the merger and all
deposit accounts established at Ridgewood Savings prior to the merger will be
deemed to have been established at Boiling Springs Savings on the date that they
were established at Ridgewood Savings.
4. Treatment of Stock Benefit Plans. We understand that Ridgewood Savings
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has established the Ridgewood Savings Bank of New Jersey Employee Stock
Ownership Plan ("ESOP") and the Ridgewood Savings Bank of New Jersey 401(k) Plan
("401(k)") for the benefit of Ridgewood's employees. We will treat the ESOP,
401(k) and other benefits due under such plans to participants on terms that are
similar to or more favorable than the manner in which Provident has agreed to
treat such matters pursuant to the Provident Agreement.
5. Treatment of Employment Contracts. Boiling Springs will honor all
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obligations under Ridgewood's employment agreements and will make any payments
required to be made thereunder in connection with the proposed transaction.
Boiling Springs will also provide the President of Ridgewood Savings with a
consulting agreement, and the Executive Vice President and Chief Operating
Officer of Ridgewood Savings with an employment agreement, the terms of which
are at least as favorable to the agreements or arrangements offered by
Provident.
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6. Board; Management and Employees. It is expected that Boiling Springs
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would invite those current members of Ridgewood Savings Bank's Board of
Directors to participate in the governance of the company on a going forward
basis. Accordingly, Boiling Springs, MHC will increase its board of directors by
at least one member and, if the banking subsidiaries are merged, appoint, in its
discretion, at least one member of the Ridgewood Savings Board of Directors to
Boiling Springs' Board of Directors for a term that expires no earlier than the
annual meeting following the year ended December 31, 2001. If, however,
Ridgewood Savings is maintained as a separate subsidiary of Boiling Springs, it
is expected that Boiling Springs Savings will invite at least 3 members of the
Ridgewood Savings Board to remain on the Ridgewood Savings Board following the
consummation of the merger. Boiling Springs will also establish an advisory
board to consist of those persons who currently serve on the Ridgewood Savings
Board of Directors (with the exception of the Executive Vice President and Chief
Operating Officer of Ridgewood Savings). Advisory board members will receive
fees in an amount that is at least equal to the fees they would receive under
the Provident Agreement. The advisory board will be maintained for a period of
at least three years following the consummation of the merger. Further, Boiling
Springs intends to retain substantially all of the employees of Ridgewood
Savings, subject to due diligence and review of staffing needs.
7. Due Diligence Review. Our proposal is contingent on Boiling Springs
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being satisfied with the results of its due diligence review of Ridgewood. We
would require a period of approximately one week to conduct due diligence, which
would commence on a mutually agreeable date in the immediate near term. The
proposal contained herein would not be terminated or modified by our findings of
such due diligence review provided that such findings do not result in our
determination that Ridgewood is subject to conditions which would materially
adversely effect the value of Ridgewood as a whole as determined by its
previously publicly available statements of financial condition, results of
operations and other material disclosures.
8. Definitive Agreement. The contemplated transaction will be subject
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to the execution of a final agreement by and between Ridgewood and Boiling
Springs containing customary terms, representations and warranties, covenants
and conditions satisfactory in form and substance to the parties and, as stated
above, at least as favorable to Ridgewood as those contained in the Provident
Agreement.
9. Regulatory Approvals. Consummation of the transaction would be
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conditioned on obtaining all necessary regulatory approvals. Following execution
of the definitive agreement, the parties would promptly prepare and submit
applications for approval of the transaction to appropriate state and federal
bank regulatory agencies. This proposal is subject to and would be in compliance
with applicable New Jersey and federal laws, including New Jersey Statutes
Annotated ss. 17:9A-383.
10. Confidentiality. Immediately following the commencement of negotiations
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between Ridgewood and Boiling Springs regarding the terms of a definitive merger
agreement, all information and documents (other than information or documents
that are publicly available) received by either party from the other during the
course of discussions or in contemplation of the transaction will be held in
confidence and will be returned upon request if negotiations are
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terminated. Confidential information of either party will be used solely for
purposes of evaluating the proposed transaction, and will be used for no other
purpose whatsoever.
11. Transaction Fees. Boiling Springs and Ridgewood will each pay their
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own expenses in connection with the transactions contemplated by this proposal,
including attorneys' and accountants' fees.
12. Funding the Merger Consideration. At or prior to the consummation of
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the merger, Boiling Springs will deposit with an independent third party
exchange agent immediately available funds sufficient to pay Ridgewood
Financial's shareholders the aggregate merger consideration. Boiling Springs
currently has sufficiently available funds to pay the proposed aggregate merger
consideration and Boiling Springs will not require any third party financing to
pay such aggregate merger consideration.
13. Payment of Termination Fee. We acknowledge that there is a $1.0
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million cash break-up fee payable to Provident in Section 7.02(b) of the
Provident Agreement.
COMPARISON AND SUPERIORITY OF BOILING SPRINGS' PROPOSAL TO PROVIDENT'S PROPOSAL
The Boiling Springs Board of Directors believes that this proposal is
superior to the Provident proposal. The Board's assessment is based upon its
consultations with its financial advisor and based upon a comparative analysis
performed on the Provident and Boiling Springs transactions. Such comparison
demonstrates that our proposal represents a 25% premium to Ridgewood Financial's
September 18, 2000 trading price of $14.4375. Further, all of the other terms of
our proposal will be at least as favorable to the terms of the Provident
transaction. As illustrated in the following table, our proposal to pay $18.00
per share represents a substantial premium when compared to the Provident
Agreement's premium specifically, and the premiums paid in comparable
transactions in 2000 as a whole.
Ridgewood's June 30,
2000
Price to
Last Last
Twelve Twelve
Months' Price to Months' Book
Earnings Book EPS Value
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Boiling Springs' $18.00 Proposal for Ridgewood....... 46.15x 226.70% $ 0.39 $ 7.94
Provident's $15.00 Proposal for Ridgewood............ 38.46 188.92 $ 0.39 $ 7.94
Multiples Through September 14, 2000
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National Thrift Acquisitions Announced for 2000...... 19.75 149.18
Mid Atlantic Thrift Acquisitions Announced for 2000.. 27.35 143.35
Thrift Acquisitions (deal Value $10M to $50M)
Announced for 2000................................... 19.68 138.88
Comparable Thrift Acquisition Multiples (defined by
our financial advisor)............................... 26.15 145.84
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Additionally, we believe that a combination of Ridgewood and Boiling
Springs would be more beneficial to the communities, customers and members
served by Ridgewood as compared to a combination with Provident. Boiling Springs
is a Bergen County based institution, focused on meeting the needs of our
community. Currently, Boiling Springs has eight branch locations, six of which
are located in Bergen County. At June 30, 1999, 96.43% of our deposit base was
from our Bergen County branches. In contrast, Provident is a Hudson County
institution with only four Bergen County branches, which accounted for a mere
7.35% of its deposit base at June 30, 1999. As we already serve similar
geographic community and member interests from our Wyckoff branch, we believe
that we will effectively serve the Ridgewood and Mahwah communities. Clearly, we
believe that our significant presence in the overlapping communities will enable
us to better serve the needs of Ridgewood's Bergen County customer base. We also
believe that our proposal to maintain Ridgewood Savings as a separate subsidiary
will more favorably benefit the communities served by Ridgewood Savings and its
employees as Ridgewood Savings will not lose its identity or customer
recognition and we will be better able to preserve the positions of current
employees.
DUTY TO CONSIDER OUR PROPOSAL
We have reviewed the terms of the Provident Agreement with our advisors
and believe that our proposal is a "Superior Proposal" as contemplated by
Section 5.06 of the Provident Agreement. As you know, Section 5.06 contains a
"fiduciary out" provision that Ridgewood negotiated as part of the Provident
Agreement, which reads in pertinent part:
. . . . provided, however, that nothing contained in this Section
5.06 shall prohibit the Board of Directors from: (i) furnishing
information to, or entering into discussions or negotiations with
any person or entity that makes an unsolicited written, bona fide
proposal, to acquire Ridgewood Financial and Ridgewood Savings
pursuant to a merger, consolidation, share exchange, business
combination, tender or exchange offer or other similar
transaction, if, and only to the extent that, (A) the Board of
Directors of Ridgewood Financial receives a written opinion from
its independent financial advisor that such proposal may be
superior to the Merger from a financial point of view to
Ridgewood Financial stockholders, (B) legal counsel advises
Ridgewood Financial that the proposed acquiror may legally
acquire Ridgewood Financial and Ridgewood Savings, (C) the Board
of Directors of Ridgewood Financial, after consultation with and
based upon the advice of independent legal counsel, determines in
good faith that such action is necessary for the Board of
Directors of Ridgewood Financial to comply with its fiduciary
duties to stockholders under applicable law (such proposal that
satisfies (A) (B) and (C) being referred to herein as a "Superior
Proposal"), . . . .
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In response to our prior inquiries, we have been advised by Ridgewood that
Ridgewood would not entertain any business combination that would compromise its
independence. The Provident transaction represents a change in Ridgewood's
policy of independence. We believe that the inclusion of the fiduciary out
provision in the Provident Agreement reflects the Ridgewood Financial Board's
understanding that the abandonment of this policy carries with it the fiduciary
obligation to review competing proposals in order to maximize the value of the
consideration it is to secure for its minority shareholders in connection with
the extinguishment of their equity interest in Ridgewood Financial. Otherwise,
the Ridgewood Financial Board would not have any diligent assurance that it had
obtained a proposal sufficiently attractive to its minority shareholders.
Based upon all of the foregoing, we are confident that Ridgewood will be
willing to promptly engage in good faith negotiations regarding what we believe
is precisely the Superior Proposal contemplated by the Provident Agreement and
look forward to the forthcoming dialogue.
Your prompt response to this proposal would be greatly appreciated so that
we may undertake the necessary negotiations and due diligence activities.
Accordingly, please furnish us with a response to this proposal by no later than
5:00 p.m., September 25, 2000.
Boiling Springs Bancorp, Boiling Springs, MHC and Boiling Springs Savings Bank
and their respective directors and executive officers may be deemed to be
participants in the solicitation of proxies of stockholders of Ridgewood
Financial, Inc. ("Ridgewood Financial"). The Boards of Directors of Boiling
Springs Bancorp, Boiling Springs, MHC and Boiling Springs Savings Bank consist
of J. Raymond Carey, Edward C. Gibney, Peter F. Benedict, Walter R. Calhoun, W.
Thurston Cooper, J. Christopher Ely, Kenneth Grimbilas, Henry Shotmeyer, Jr. and
Armand S. Toron. Neither Boiling Springs Bancorp, Boiling Springs, MHC, Boiling
Springs Savings Bank nor any of their respective directors and executive
officers beneficially owns any shares of Ridgewood Financial common stock.
Ridgewood Financial may file a proxy statement and other relevant documents with
the Securities and Exchange Commission ("SEC"). INVESTORS ARE URGED TO READ THE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain these
documents free of charge at the SEC's website, WWW.SEC.GOV. Documents that
Ridgewood Financial files with the SEC will also be available free of charge
from Ridgewood Financial, Attn: Corporate Secretary, 55 North Broad Street,
Ridgewood, New Jersey 07450, telephone 201-445-2000. READ THE PROXY STATEMENT
CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.