Hawaiian Electric Industries (HEI) has completed the sale of 90.1% of its common stock in American Savings Bank (ASB) to a group of independent investors in a deal that values the lender at $450m.
The transaction generated $405m in cash for Hawaiian Electric Industries.
The divestment follows a strategic review of ASB announced by Hawaiian Electric Industries’ board of directors on 9 August 2024.
The board evaluated multiple options for the bank, considering factors such as transaction certainty, proceeds, regulatory implications, and stakeholder impact, before deciding on the sale.
ASB president and CEO Ann Teranishi said: “This represents the best outcome for ASB, our customers, employees, and the communities we’ve served since 1925 as we focus on the next 100 years.”
Each investor in the transaction retains a non-controlling interest, with no individual owning more than 9.9% of the bank’s common stock.
Hawaiian Electric Industries retains a 9.9% stake in ASB. The investor group includes ASB’s executive team and independent directors, ensuring the bank remains locally operated in Honolulu under its existing management and brand.
The sale transforms ASB into an independent, locally headquartered bank while allowing HEI to streamline its operations.
Hawaiian Electric Industries is expected to no longer be classified as a savings and loan holding company with a reduced ownership stake in the bank. The divestment enables HEI to focus on its core utility operations through Hawaiian Electric.
The company stated it will evaluate opportunities to enhance efficiency following the sale, while continuing its review of strategic options for its Pacific Current subsidiary, which remains ongoing.
Hawaiian Electric Industries president and CEO Scott Seu said: “This transaction marks an important step in HEI’s efforts to best position our companies to serve our customers and communities for the long term.
“As we navigate a dynamic time in the banking industry, we are confident selling 90% of ASB to independent investors is the best approach for HEI, ASB and our communities.
“The sale allows HEI to enhance our focus on the utility as we work to help our state recover from the 2023 Maui wildfires and strengthen the financial and strategic position of our company.”
For the transaction, Piper Sandler and Guggenheim Securities served as financial advisers to Hawaiian Electric Industries, with legal counsel provided by Sullivan & Cromwell.
