CPF said to change
offer for City Bank

The parent of Honolulu’s
Central Pacific Bank has
scheduled a conference call
Monday for an announcement

Central Pacific Financial Corp., facing increased pressure from its shareholders to bring some type of closure to its hostile takeover of City Bank's parent, has scheduled an investor conference call on Monday morning to announce that it will change its offer, a person familiar with the situation said yesterday.

"It will change its offer in such a fashion as to force the issue to be resolved one way or another," the source said, adding that it was likely there would be a time limit involved.

Central Pacific spokeswoman Ann Takiguchi said she couldn't comment on the announcement, which will be made at 3 a.m. Hawaii time ( 8 a.m. EST), 90 minutes before the stock market opens.

Clint Arnoldus, chairman, chief executive officer and president of Central Pacific Bank's parent, didn't return a phone call.

In another development, Nick Griffin, commissioner of the Hawaii Division of Financial Institutions, said he has notified CB Bancshares Inc. that there is no provision in state law to appeal an earlier DFI decision granting Central Pacific the go-ahead to proceed with the takeover.

Although yesterday's announcement of the conference call wasn't made until after the market closed, CB Bancshares' stock rose $1.05, or 1.6 percent, to $68.55 on heavy volume of 47,231 shares. The trading action was nearly seven times its six-month average daily volume of 6,889 shares and was the heaviest in more than five weeks.

Central Pacific's stock also gained on heavy volume as it jumped $1.22, or 4.7 percent, to $27.08. Volume was 48,800 shares, more than double its six-month average daily volume of 21,264.

Joe Morford, an analyst who covers Central Pacific Bank for San Francisco-based RBC Capital Markets, said there were two likely scenarios for the announcement.

"The most likely options will be they'll either sweeten their bid or pull their bid, and at this juncture I think the odds may favor a higher bid."

Central Pacific, which made its offer public on April 16, 2003, amended the original $285 million proposal on May 9 to change the stock-cash component. The offer, worth the equivalent of about $70 a share for CB Bancshares' shareholders, was changed to 65 percent of Central Pacific stock and 35 percent cash from a 70-30 ratio.

The value of the deal as of yesterday's market close was $284.6 million, or $65.61 per share of CB Bancshares stock. CB Bancshares' closing price of $68.55, which is 4.5 percent above the current value of Central Pacific's offer, indicates that shareholders believe Central Pacific will be sweetening its bid.


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