Activist Investor Pressures Eastern Bankshares to Pursue Sale Over Acquisitions, Sources Say

Activist Investor Takes Position in Boston Bank

Activist investor HoldCo Asset Management has reportedly built a substantial position in Eastern Bankshares and is pushing the storied Boston financial institution to put itself up for sale rather than continue acquiring other banks, according to people familiar with the matter.

Sources indicate the Florida-based hedge fund, which oversees approximately $2.6 billion in assets, has accumulated a 3% stake in Eastern in recent months and is advocating for a potential sale to larger regional players, possibly including Buffalo-based M&T Bank. The push comes as analysts suggest bank mergers and acquisitions may increase under expected regulatory changes.

Capital Allocation Concerns

According to documents seen by Reuters, HoldCo is criticizing Eastern’s management for what it describes as “poor allocation of capital,” including three acquisitions made within five years and multiple securities restructuring initiatives. The hedge fund argues these moves have consumed nearly all the excess capital Eastern received when it transformed from a mutual savings bank to a publicly traded company in 2020.

The report states that Eastern’s IPO raised $1.8 billion, but recent purchases of Century Bancorp, Cambridge Bancorp and HarborOne Bank have allegedly hurt shareholders. HoldCo reportedly claims shareholders would have been better off if management had refrained from these strategic moves, according to the analysis seen by Reuters.

Potential Proxy Fight Looms

Sources familiar with HoldCo’s thinking say the firm is prepared to escalate pressure on Eastern’s management, potentially including launching a proxy fight to replace directors. The hedge fund’s founders, Vik Ghei and Misha Zaitzeff, reportedly stated in documents that “nothing would please us more than a consensual resolution, but a proxy contest and any and all other options are on the table.”

Zaitzeff brings previous board experience from another Boston-based bank, Berkshire Hills Bancorp, where he served as part of a 2021 settlement between the hedge fund and the institution. Eastern currently has 15 directors, with five including former CEO Robert Rivers scheduled to stand for election in 2026.

Strategic Divergence

While Eastern reportedly cites its acquisitions as strengths that helped assets grow from $12 billion in 2019 to an expected $30 billion, HoldCo disagrees with this assessment. According to the hedge fund’s analysis, had Eastern refrained from mergers and securities restructurings, it would conservatively have $13.90 per share of excess capital versus a current stock price of approximately $17.

The banking sector continues to navigate market trends and evolving challenges. Eastern’s position as Boston’s leading local bank with more than 100 branches and loyal small business customers makes it potentially attractive to larger acquirers, analysts suggest. The institution’s low deposit costs reportedly add to its appeal as a takeover target.

Industry Context and Timing

HoldCo’s push comes just two weeks after the firm played a role in an $11 billion deal where Fifth Third agreed to acquire Comerica. According to reports, the hedge fund had been pushing Comerica to sell itself and escalated pressure in September by threatening to nominate five directors to its board.

This development occurs alongside other significant industry developments and related innovations in the financial technology space. The banking industry is also watching broader market trends and recent technology advancements that could impact financial services.

Additional coverage of this developing story can be found through financial news outlets and official news sources as the situation evolves.

This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.

European businesses are bracing for heightened geopolitical pressures and regulatory shifts as the EU pushes for greater technological sovereignty. Analysts suggest that reducing dependencies on non-European digital platforms and AI providers will dominate corporate strategies in 2026.

Geopolitical Strains Shape European Business Strategies

Geopolitical tensions are expected to significantly influence European firms through 2026, with uncertainty around U.S. policy decisions impacting both immediate and long-term planning, according to industry reports. Sources indicate that organizations across the continent are intensifying efforts to decrease reliance on external entities, including Chinese supply chains and U.S.-based digital infrastructure providers.