Posted on: Friday, June 13, 2003

City Bank says vote rejected CPB bid

By John Duchemin
Advertiser Staff Writer

City Bank parent CB Bancshares said yesterday that certified results of its May 28 shareholder vote show shareholders rejected the hostile bid by Central Pacific Bank to take over City Bank.

About 29.5 percent of shareholders voted against the merger, while about 13.4 percent voted in favor of the $275 million takeover attempt, according to Delaware vote-counting company IVS Associates Inc. More than half of the total shares refrained from voting.

IVS completed the final tally yesterday. The vote was held on May 28.

Despite the certification, Central Pacific officials continued to portray the vote as a victory for them. The would-be buyer had called for a boycott of the vote in an attempt to deny a quorum and show that a majority of CB Bancshares shareholders support the takeover.

"We continue to believe that the most accurate characterization of these results is that CBBI (CB Bancshares) received support for its position from less than 30 percent of its shareholders," Central Pacific said yesterday in a statement.

The official vote results likely will determine the next step in Central Pacific's quest to take over its local competitor. Central Pacific has charged that the vote did not meet a quorum and therefore did not count.

CB Bancshares said the final results show it barely achieved quorum, with 50.4 percent of eligible shares being voted. CB Bancshares needed more than 50 percent to reach quorum.

CB Bancshares excluded from its quorum calculations the 11 percent of its shareholder base owned by Central Pacific and its closest ally in the takeover attempt, investment firm TON Finance BV.

CB Bancshares spokesman Wayne Miyao said yesterday that the vote results are valid whether or not a quorum was reached.

"The quorum shouldn't change the results of the meeting," he said. "We believe it was Central Pacific's burden to achieve a quorum, and they failed. That's all we have to say."

Central Pacific has said it may challenge the vote in court. It also pushed for a later vote date, saying the May 28 vote didn't give CB Bancshares shareholders enough time to consider the merits of the $70-per-share offer.

The vote is one of a series of steps necessary for a Central Pacific takeover.