Lawsuits say BNP Paribas stock offer 'unfair'

BancWest chairman Walter Dods said any ownership change will not alter bank services. Richard Ambo • The Honolulu Advertiser

By Frank Cho
Advertiser Staff Writer

Since news that French banking giant BNP Paribas is offering $35 a share for the 55 percent of BancWest stock it doesn't already own, the bank's share price has soared to $34.37 from Friday's closing price of $24.98.

But despite the offer's 40 percent premium over the bank's stock price before the deal was announced, some shareholders say it is still inadequate.

Since BNP's offer was announced, eight lawsuits have been filed by shareholders seeking to stop the sale.

In a lawsuit filed in a Delaware court yesterday, Brucha LLC claims BancWest directors were influenced by BNP and are allowing the company to be sold too cheaply.

Of BancWest's 20-member board that voted unanimously Monday night to accept the deal, nine represent BNP.

According to the Delaware suit, the $35 per-share price is "unfair and inadequate," especially considering "the prospects for growth and profitability of BancWest."

BancWest officials declined to comment about the lawsuit.

The suit is asking the court to stop the deal and award unspecified damages and attorneys' fees.

Analysts yesterday said they believed the suits were probably attempts to get a higher price for shareholders, but that they were unlikely to succeed.

"These (suits) are pretty standard. Given the recent multiples banks have been selling for, these suits probably are not going anywhere," said Joe Morford, a San Francisco-based banking analyst with Dain Rauscher Wessels.

The suits were filed as BancWest chairman and chief executive Walter Dods outlined details yesterday of the French bank's offer and his plans to grow the bank.

Dods said he committed to a three-year contract with the bank and said customers will not notice any ownership change because all services will remain the same.

Dods said he plans to grow the parent company of First Hawaiian Bank into one of the nation's top 25 banks, but said deals to do so will have to "make sense."

"We are not going to buy size just for size's sake," Dods said.

For the past 2 1/2 years, Dods said an agreement with BNP inhibited BancWest from doing large acquisitions that would have diluted the French bank's stake.

BNP Paribas was Banque Nationale de Paris in 1998 when its West Coast subsidiary, BancWest, merged with First Hawaiian Inc., to create a new BancWest, giving BNP a 45 percent share ownership.

Analysts said the list of likely acquisition targets is not long.

"There has been a continual consolidation of the mid-sized regional banks," Morford said. "That does not leave a lot left for BancWest, especially if it's paying cash."

Morford said the efforts by BancWest's rival, Pacific Century Financial Corp., to sell its Pacific Century Bank subsidiary in California should draw a lot of interest from suitors, including BancWest.

Morford said another possible target could be Key Bank. The Cleveland, Ohio-based bank is the right size and has operations in western states near BancWest.

But most likely, BancWest will try to expand its presence in markets it's already in, Morford said.