Tuesday, January 8, 2002

Kamehameha sells
Goldman shares

The isle trust sheds 5.45 million
shares, reaping $503 million

KSBE revenues top $1 billion

By Takahiko Hyuga
Bloomberg News

NEW YORK >> Kamehameha Activities Association, closing out its affiliation with Goldman Sachs Group Inc., pocketed about $503 million after selling its remaining 5.45 million shares in the large New York investment firm.

The former Bishop Estate, which sold its shares at $93 apiece in a trade arranged by Goldman after the New York Stock Exchange closed yesterday, was a 2.9 percent discount from the closing price yesterday of $95.75. The $503 million redemption is after a 1.5 percent underwriting fee.

Kamehameha President Wallace Chin said the association will use the proceeds to fund the education of native Hawaiians at the Kamehameha schools and invest with its 12 money managers.

At the same time, Sumitomo Mitsui Banking Corp., the world's second-largest bank, also closed out the investment it made when Goldman was Wall Street's biggest private partnership.

The Tokyo-based bank netted $794 million from its sale of 8.67 million shares after fees, said Seiichi Jo, a Sumitomo Mitsui spokesman. The bank reaped a $2.45 billion profit from its 15-year investment in the firm.

"It was no doubt a good investment for Sumitomo Mitsui," said Hironari Nozaki, an analyst at HSBC Securities Japan Ltd. "The timing isn't bad considering Goldman shares aren't doing badly against the U.S. market as a whole."

Kamehameha's 1.1 percent stake made the charity the ninth-largest owner of Goldman. Kamehameha invested $500 million in Goldman, half in 1992 and half in 1994. The charity already has reaped proceeds of $2.05 billion from four prior stock sales, Chin said.

Shares of Goldman, the biggest stock underwriter and merger adviser last year, fell $3.25 to close at $92.50 today. The stock has risen 42 percent since Sept. 20, when it reached its low after the terrorist attacks.

The Standard & Poor's 500 index gained 18 percent in the same period. Goldman's stock reached a record $133.625 in September 2000.

Goldman in November said the Kamehameha and Sumitomo Mitsui had filed with regulators to sell the shares.

Even with yesterday's sale, Goldman will have only about 40 percent of its shares available for trading, insufficient for inclusion in the S&P 500. Current of former Goldman employees owned 51 percent of the company as of Dec. 31.

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