DAVE SEGAL / DSEGAL@STARBULLETIN.COM
Ronald Migita, CB Bancshares Inc. chief executive, made his first public comments yesterday on the takeover attempt by rival CPB Inc. Migita said the company will make a decision on its own timetable.
Battle of the banks
CB Bancshares says it won't be
bullied into a merger decisionCB Bancshares Inc., unwilling to give in to CPB Inc.'s merger deadline, lashed back yesterday at its rival's takeover tactics and said it won't make a decision on a $285 million proposal until it has been fully examined.
"I don't know about the use of the word or phrase, 'strong arm or hostile,' but I can certainly assure you and the community that this is not how we do business in Hawaii," said Ronald Migita, CB Bancshares' president and chief executive officer.
Migita, appearing publicly for the first time since CPB announced the merger offer April 16, entered a press conference yesterday after it had formally begun, read for less than two minutes from a statement, then answered about a dozen questions before departing from the room. The entire news conference lasted about 10 minutes.
What it lacked in duration, though, was made up for by the tone of the brief responses uttered by Migita. He made it clear that CB Bancshares, the parent of City Bank, wasn't going to be bullied into making a decision based on CPB's timetable. Migita said he sent a letter yesterday to Clint Arnoldus, CPB's chairman, president, and CEO, to inform him that CB Bancshares will respond "in a timely fashion" but not before tomorrow's noon deadline. CPB confirmed later it received the letter.
Arnoldus, who was in New York meeting with analysts, investors and advisers, said CPB, the parent of Central Pacific Bank, went public with its offer because of CB Bancshares' reluctance to sit down at a negotiating table over the course of a month.
The two sides had only one head-to-head meeting during that period, consisting of CB Bancshares asking a lot of questions, Arnoldus said.
"After a month of trying to establish friendly discussions, we concluded that the only way to ensure that shareholders, customers, employees and Hawaii were informed about our formal offer was to take it public," Arnoldus said in a statement.
Migita also insisted at yesterday's news conference that CB Bancshares has not received an offer from CPB, but instead a proposal. He described a proposal as being in the form of a letter.
When pressed to give his definition of an offer, he declined to elaborate.
"I really don't want to get into that because I'd be speculating," Migita said. "But as far as I'm concerned and as far as we're concerned, what we have currently is a proposal."
To clear up any confusion, Arnoldus said yesterday that CPB has "definitely made a formal offer."
CB Bancshares also released yesterday the identities of its financial adviser and legal counsel. CPB previously had been critical of CB Bancshares for its apparent lack of urgency in obtaining outside help.
New York-based Sandler O'Neill & Partners LP, a large investment bank serving financial services companies, was selected as financial adviser. The firm had 24 whole bank and thrift transactions with an aggregate value of more than $2.8 billion last year. Sandler O'Neill's former headquarters, previously on the 104th floor of Two World Trade Center, lost 66 of its employees in the 9/11 terrorist attacks.
CB Bancshares also hired New York-based law firm Skadden, Arps, Slate, Meagher & Flom LLP, one of the largest law firms in the world with approximately 1,800 attorneys. The Honolulu law firm of Kobayashi, Sugita & Goda was hired to assist.
Migita indicated at the news conference that it could be weeks before CB Bancshares' board makes a decision.
"We're working as fast as we possibly can, bearing in mind, of course, the responsibility of the board of directors in rendering a decision," he said. "We're being as expeditious as possible."
"Hopefully, it will be shorter than months, but I don't want to speculate on exactly how much time will be given," he added.
Migita also declined to speculate on what direction the management and board are leaning or how CB Bancshares would respond if CPB makes a tender offer to CB Bancshares' shareholders.
For CPB to acquire 20 percent or more of CB Bancshares' stock, CPB would need federal and state regulatory approval, as well as shareholder approval under the Hawaii Control Share Acquisitions Statue. However, CPB likely wouldn't be able to close the deal unless it reached agreement with CB Bancshares' board. A hostile takeover with CB Bancshares' poison pill in place would allow CB Bancshares shareholders other than CPB to acquire additional shares at a 50 percent discount and dilute the value of CPB's stake. At CB Bancshares' current price range of between $60 and $70 in market value, CB Bancshares shareholders would be able to acquire approximately three shares for every one they hold.
"A union of two banks of our size is a serious matter and we need to look at all aspects of a proposal of this nature," Migita said. "It includes not only the fairness of the price, but it includes the impact on the employees, our shareholders, the communities that we serve and other stakeholders."
"There are a number of factors involved in a decision like this. One does not take precedence over the other," he added.
Central Pacific Bank
City Bank
