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Hedge fund Driver Management pushes for sale at Codorus Valley Bancorp By Reuters


© Reuters.

By Svea Herbst-Bayliss

BOSTON (Reuters) – Activist investment firm Driver Management, which specializes in pushing small banks to improve their financial returns, has found a new target and is now urging Codorus Valley Bankcorp Inc to consider letting itself be bought, two sources familiar with the matter said on Tuesday.

Driver Management, founded two years ago by former investment banker Abbott Cooper, owns a 6% stake in Codorus, a bank holding company, and is expected to make a regulatory filing disclosing its stake and some of its intentions soon, the sources said.

Codorus, which is headquartered in York, Pennsylvania, is valued at $202 million and specializes in providing banking services through its subsidiary PeoplesBank in south central Pennsylvania and northern Maryland. Its share price has climbed 21% this year and traded at $20.20 on Tuesday.

The company did not respond to a request for comment.

Driver’s new investment comes as analysts are forecasting a pickup in mergers and acquisitions in the still-fragmented small bank sector. Driver has successfully pushed for other banks to be bought over the past two years.

Cooper wants Codorus to immediately hire a financial adviser to review all options including a sale, a source familiar with the fund manager’s thinking said.

He has expressed concerns to the bank about long-term underperformance and a lack of scale, and has offered to enter a standstill agreement if the bank seriously considers a sale, the source said.

For Driver, the new investment comes on the heels of a win. Last month United Bankshares (NASDAQ:) said that it would buy Community Bankers (NASDAQ:) Trust Corporation, which Driver had last year pushed to sell itself. Driver Management has gained roughly 48% since January, a person familiar with its return said.

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