Brookline Bancorp Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Brookline Bancorp (Nasdaq: BRKL  ) dropped 10% in intraday trading today after announcing first-quarter results and an acquisition agreement.

So what: First-quarter EPS of $0.12 met the consensus estimate and was up from $0.11 in the year-ago quarter. Brookline has agreed to acquire Bancorp Rhode Island (Nasdaq: BARI  ) and its BankRI unit for about $234 million in cash and stock.

Now what: The acquisition is expected to close in the fourth quarter and be accretive to EPS by approximately 25% percent in 2012. Bancorp Rhode Island shareholders will receive $48.25 in cash and/or shares for each share they hold, a whopping 57% premium to yesterday's closing price of $30.71. Despite Brookline management expectations that the deal will be accretive, shareholders are justified in questioning the acquisition premium.

Interested in more info on Brookline? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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