CPB weary of spat with rivals
By David Butts
Advertiser Staff Writer
Clint Arnoldus, chairman of Central Pacific Bank, said yesterday he regrets commenting last month that his bank is more local than its main rivals, but added that the reaction from Walter Dods and Mike O'Neill was a bit over the top.
Bruce Asato • The Honolulu Advertiser
"I said some things I shouldn't have said. They said some things they shouldn't have said. And that's the end of the story," Arnoldus said yesterday.
Clint Arnoldus, chairman of Central Pacific Bank, outlined aspects of a proposed merger with City Bank in a presentation Wednesday to the Advertiser Editorial Board. City Bank has scheduled a shareholders meeting about the matter.
The bickering among Hawai'i's top banking executives began shortly after Central Pacific Bank announced on April 16 a hostile takeover bid to buy rival City Bank for $285 million.
In an attempt to explain the competitive opportunity for a merged bank, Arnoldus pointed out what he perceived as weaknesses of his bank's main rivals, First Hawaiian Bank, chaired by Dods, and Bank of Hawaii, headed by O'Neill.
"First Hawaiian is now owned by a French parent, and that's not the most popular foreign ownership to have right now, to say the least," Arnoldus said on April 17. "Bank of Hawaii has taken the strategy of loading the senior management with Mainland imports, and in the process has actually alienated the market."
The comments drew swift responses. Dods challenged Arnoldus to a debate "in pidgin" on what it means to be local, and O'Neill said Arnoldus reminded him of "The Mouse That Roared," a satire about a small country declaring war on the United States.
Arnoldus said yesterday he'd like to put the whole mess behind him and get on with discussing the merits of the proposed merger.
"I would hope that that flurry would not take away from how good this transaction is," Arnoldus said. "Any headline addressing that issue does not change this transaction. This is a transaction where Hawai'i is a clear winner."
Asked if he regrets making the statements, Arnoldus said: "You know, I made some observations about our competition that, well, let me just say, yes, I do. I just think I will leave it a simple yes. Hawai'i has some very good banks, some very strong competition and we respect our competition."
In addition to the negative reaction from Dods and O'Neill, Arnoldus was targeted by Ronald Migita, president of City Bank, who said the hostile takeover bid is "not how we do business in Hawai'i."
To that, Arnoldus said, "Whether you are in Hawai'i, California, Wyoming, Texas, wherever you are, there is one compelling issue that drives you no matter what, and that is shareholder value. Our jobs as management teams are to protect and enhance shareholder value, and Hawai'i is not different from any other state in that respect."
Arnoldus said he hopes to eventually win the support of City Bank management for the takeover bid and that he called Migita on Sunday to talk about the next step in the offer. "He was very gracious," Arnoldus said. "We exchanged home phone numbers. I reaffirmed our desire to sit down and negotiate this transaction." They spoke for "two or three minutes," Arnoldus said.
Also yesterday, City Bank said it set May 28 for a special shareholders meeting.
City Bank spokesman Wayne Miyao said the purpose will be to vote on whether to allow Central Pacific to continuing collecting shares toward its takeover bid without triggering a "poison pill" provision. The provision floods the stock market with extra City Bank shares if a would-be buyer acquires more than 20 percent of shares.
Central Pacific asked City Bank on Monday to hold a shareholder meeting to consider the takeover offer.
Correction: A previous version of the photo caption contained a wrong date. The photo was taken at a Wednesday meeting of The Advertiser Editorial Board.
