Showdown for Sovereign

Relational specializes in targeting companies whose shares it believes have underperformed because of an entrenched management with a history of poor corporate governance. The nine-year-old firm, according to its Web site, generally invests in no more than 12 companies at a time. The firm only takes a long position in the company it targets.

A year ago, Relational began a proxy battle over SPX(SPW), a North Carolina-based manufacturer of cooling equipment for heavy industry. Relational was critical of SPX's history of excessive pay packages. The asset-management firm abandoned the proxy fight after SPX's chairman and CEO was forced out by the board, and the company overhauled its process for determining executive pay.

However, proxy battles are rare for Relational. A person familiar with the firm says it prefers to work with management to bring about structural changes for the benefit of shareholders.

Relational is led by Ralph Whitworth and David Batchelder, both of whom worked in the 1980s at T. Boone Pickens' Mesa LP. Both Whitworth and Batchelder will be at the meeting, along with many of Relational's 12 analysts.

There is much sympathy on Wall Street for Relational's battle with Sidhu, who owns 1% of the bank's shares and is not highly regarded by many institutional investors. But several said they doubt the proxy battle will succeed.

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