Central Pacific to continue
hostile pursuit of City BankA certified tally of shareholders votes
yesterday confirmed the results
release by CB Bancshares
Central Pacific Financial Corp., forced to regroup after a proxy review confirmed preliminary shareholder vote results, vowed yesterday to push on with its $289 million hostile takeover attempt of rival CB Bancshares Inc.
CPF had challenged the results of the May 28 meeting of CB shareholders in the hope that a review might invalidate the results by showing that CB had failed to reach a quorum. But a review of the proxy ballots in Newark, Del., revealed that 50.4 percent, or 1,754,181 shares, of the eligible 3,482,383 shares participated in the voting. A quorum is defined as 50 percent, plus one, of the eligible votes. Preliminary results released June 3 had indicated a 50.3 percent participation.
"If you compare this with the game of baseball, the votes were tallied three times with similar results," CB spokesman Wayne Miyao said. "Central Pacific has three strikes against them and they should be out."
Still, CPF said yesterday it continues to dispute CB's definition of a quorum, because CB didn't include in its count the 88,741 shares owned by CPF and 348,264 shares owned by Ton Finance B.V., CB's largest shareholders. CB said those shares weren't included because CPF's votes were ineligible and CPF had an agreement to vote Ton's shares as the "beneficiary" owner. CPF also said the May 28 results were inconclusive because it had urged CB shareholders to boycott that meeting and wait instead for a June 26 meeting that CPF called and CB claims is invalid.
CPF said less than 30 percent of CB's shareholders rejected a proposal that would have allowed CPF to acquire at least a majority of CB's outstanding shares. CPF claims all of the 3,919,388 shares of the May 5 record date should be counted.
"It is clear shareholders support CPF proceeding with its proposal to combine these two banks and we will," CPF said in a statement.
IVS Associates Inc., the independent inspectors of election, certified yesterday that -- based on CB's definition of eligible votes -- 15 percent, or 524,202 shares, approved CPF's proposal; 33 percent, or 1,136,893 shares, rejected it; and 3 percent, or 91,649 shares, abstained. CB said a discrepancy of 1,437 votes was due to individuals who received proxies but didn't submit them. The percentages would tilt more in CPF's favor if CPF's version of eligible shares were used. CPF's quorum definition also would result in CB not obtaining a quorum.
Meanwhile, CPF's exchange offer, adjusted for CB's 10 percent stock dividend that went into effect yesterday, is now valued at $66.96 per CB share. CB shareholders would receive $22.27 in cash and 1.6005 in CPF stock for every share of CB stock.
CB has opposed the merger for several reasons, including its assertion that the offer is financially inadequate and that CB's own estimates show that about 200 people will lose their jobs.