Is Nashville's CapStar Bank the target of a hostile takeover?

Nov 9, 2017

NASHVILLE, Tenn. (OSBORNE)  --  Nashville based CapStar Bank is facing off in court against a billionaire investor who has accumulated a significant percentage of the bank’s stock.

The Nashville Business Journal says CapStar has filed suit against Gaylon Lawrence contending his purchase of CapStar shares violates banking laws. The bank says Lawrence is trying to gain a controlling interest in the bank without making his intentions clear in public filings.

Lawrence reportedly now holds a more than 8 percent interest in the company.

Credit capstarbank.com

Lipscomb University Professor of Management Andrew Borchers says investors like Lawrence are typically looking for a quick profit.

“In some cases it would be by merging. In some cases it might be by divesting certain parts of the business he’s looked at and said, ‘This company’s worth more than its current stock price if only they would do X or Y.’”

It isn’t clear what Gaylon Lawrence intends for CapStar. Whatever he has planned, Dr. Borchers says CapStar’s lawsuit isn’t likely to slow him down for long.

“Using the courts as a way to slow down and deter the investor is one approach, perhaps hoping that he’ll find another shiny object here in town to focus on as opposed to them.”

Lawrence says his actions are legal and have been cleared with state and federal regulators.

The Tennessean reports that Lawrence recently purchased a multi-million dollar home in Belle Meade and owns several Nashville properties, including the office building on demonbreun where CapStar Bank is headquartered.