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The Honolulu Advertiser
Posted on: Wednesday, June 18, 2003

Central Pacific drops meeting but attacks vote

By John Duchemin
Advertiser Staff Writer

Despite saying yesterday that it was pursuing a "new direction" in its attempt to take over local rival CB Bancshares, Central Pacific Bank continued to attack a recent controversial vote on its hostile bid.

Central Pacific lawyers said yesterday that they are entitled to investigate about 160,000 of the votes cast on May 28, when CB Bancshares shareholders rejected the $275 million takeover bid, dealing a temporary setback to Central Pacific.

Central Pacific, claiming a shift in strategy, said yesterday that it would no longer seek a June 26 meeting of CB Bancshares shareholders. That meeting would have asked CB Bancshares shareholders to vote — for the second time in four weeks — on Central Pacific's takeover proposal.

CB Bancshares spokes-man Wayne Miyao welcomed the latest development, saying Central Pacific was apparently acknowledging that the later vote was unnecessary.

"CB Bancshares has said from the beginning that the June 26 meeting was invalid," Miyao said.

But Central Pacific still calls the May 28 vote illegitimate, and in state court yesterday it won momentary judicial approval to seek evidence to back up its claim. State Circuit Court Judge Victoria Marks said Central Pacific has until Aug. 18 to produce its evidence.

A hearing is scheduled at 8:30 a.m. that day to consider a CB Bancshares motion to have Judge Marks declare the May 28 vote valid.

Central Pacific had boycotted the May 28 vote, saying it came too quickly for CB Bancshares shareholders to properly consider its offer. The vote was certified last week by an independent Delaware voting firm, IVS Associates, hired by CB Bancshares.

In the vote, about 30 percent of CB Bancshares' 4 million shares that were cast rejected the merger offer, while about 12 percent approved. Less than half of CB Bancshares shareholders voted.

But Central Pacific said CB Bancshares shareholders still haven't had a chance to express their wishes, and it also claims support of most of the target bank's shareholders.

Central Pacific also continues to seek regulatory approval for the merger, according to spokeswoman Ann Takiguchi. To consummate the deal, the bank needs approval from the Federal Reserve Board and the state Department of Commerce and Consumer Affairs. The bank's approval applications are pending with both agencies, Taki-guchi said.

She said the bank is concentrating now on securing necessary regulatory approvals and when "we feel we're in a much better position," will "move toward a combination once we receive these approvals."

Reach John Duchemin at 525-8062 or email him at jduchemin@honoluluadvertiser.com.