City Bank gets support
from largest shareholderTon Finance signs an agreement
not to vote in favor of a takeover
City Bank parent CB Bancshares Inc. says it has won a significant victory in its effort to stave off a hostile takeover by Central Pacific Bank parent Central Pacific Financial Corp.
CB Bancshares' biggest stockholder, Ton Finance, has signed a formal agreement saying it will not vote its 9 percent holding in favor of the takeover and will not sell its shares to Central Pacific or anyone else while the takeover battle continues.
"Ton will not cooperate with or assist CPF in its efforts" to acquire CB Bancshares, says the agreement filed with the Securities and Exchange Commission on Oct. 31.
That appears to be a clear reversal from what Ton, a Netherlands-registered partnership, agreed to in April. A month later, however, Ton said it did not mean to back a takeover that might not be in the best interests of CB Bancshares shareholders.
Part of its vote had to do with simply supporting the idea of a shareholders' meeting to discuss the matter, sources said.
Ton's San Francisco attorney, Gilbert Serota, could not be reached for comment, but he has said that Ton considers itself a passive investor in CB Bancshares and does not want to influence that company's directors or shareholders in their decisions.
CB Bancshares welcomed the new agreement.
"We consider this a huge victory for us, to gain their support" against the merger, said Wayne Miyao, a CB Bancshares senior vice president.
Central Pacific said it hopes that its acquisition proposal will be decided on its merits.
"It's unfortunate that City Bank is resorting to such measures as pressuring their shareholders," as well as state legislators and the state commissioner of financial institutions, "creating unnecessary anxiety among their employees and customers," said Ann Takiguchi, a spokeswoman for Central Pacific.
Central Pacific approached the City Bank parent in March about a possible merger and later took the issue directly to CB Bancshares stockholders with an offer of a mix of Central Pacific stock and cash that today would be valued at around $280 million.
Based on yesterday's CPF closing at $26.76, that would be $65.10 per CB Bancshares share. CB Bancshares closed yesterday at $63.38, up 98 cents.
