Banking industry analysts say $109 is steep and is more reflective of City Bank's desire to scuttle the merger than a realistic counteroffer.

"I don't think they are wanting to negotiate," said Brett Rabatin, an analyst with Midwest Research in Nashville, Tenn. "I think they are just trying to dissuade Central Pacific from pursuing it."

Even if Central Pacific were to increase its offer to $109, City Bank management likely would oppose the merger, said Wayne Miyao, City Bank senior vice president and spokes-man. Price is "not all you need to see to change your mind," he said.

"We would welcome any opportunity to sit down with City Bank to see how they got the $109," said Central Pacific spokeswoman Ann Takiguchi.

The discussion over the price of Central Pacific's offer could indicate that the focus of the executives working on the merger is shifting from regulatory approval to shareholder approval.

Federal regulators have approved the merger, and analysts anticipate the state will follow the federal government's lead on the issue. Once that happens, Central Pacific will need approval from shareholders of both companies before it can proceed.

City Bank still hopes it can get relief from the government. Yesterday, the bank appealed a Dec. 15 ruling by the Federal Reserve to allow the merger to move forward.

City Bank management has opposed the deal from the start, saying it would result in less competition, bank branch closures and employee layoffs. Central Pacific has said it will freeze hiring but not lay off employees and that it will open as many branches as it closes.

Central Pacific made its unsolicited offer to buy City Bank parent CB Bancshares in April when the stock traded at $46 a share. Central Pacific's offer of $70 a share, or about $300 million, is 52 percent above the share price before the takeover bid was announced.

City Bank said its earning have improved since April and that means the $70 price is too low.

"It was a bad deal then, and a worse deal now," City Bank said in its advertisement.

City Bank reported a 96 percent jump in per-share income in the second quarter of last year and an 83 percent increase in the third quarter.

City Bank says the $109 price is based on its earnings per share over the past year times 22.14, which was the average earnings multiple for bank mergers last year valued at $15 million or more.

Whether that is a fair way to evaluate the Central Pacific offer is open to question.

"I'm not saying they are wrong, but I can slice and dice it a number of ways," said Joe Morford, a bank analyst with RBC Capital Markets. "I just looked at three different graphs, and I have three different numbers ... 24.7 ... 20.5 ... 17.3. It really moves around."

"I think City Bank management is not interested in the acquisition, so it's likely that they will always state numbers that will be a stretch," said Rabatin.

City Bank is asking the 9th U.S. Circuit Court of Appeals in San Francisco to reverse the Federal Reserve decision, but that could be a long shot.

City Bank is "very unlikely to succeed on that appeal," said Williamson Chang, a University of Hawai'i law professor. "In administrative law, the agency is assumed to have great expertise."

Chang also believes it would be unusual for Nick Griffin, the state commissioner of financial institutions, to rule against the merger despite two days of public testimony in December that mostly favored City Bank's position.

Griffin has until Feb. 18 to render a decision.

"I don't think the state would interfere at this point," said Chang. "The Federal Reserve and Department of Justice (which also ruled in favor of the deal) have wide experience in examining these mergers."

Chang said he knew of no case in which the state went against the federal regulators in a bank merger.

Although people opposed to the merger may regret the loss of intimacy that smaller banks provide, Chang said, "There is not much you can do about that. It's part of the globalization thing that is trickling down and reaching Hawai'i."