As well as criticizing Dime Chief Executive Lawrence Toal and the thrift's earnings power, Kanas restated his belief that no other banks are interested in making a counterbid for Dime. In an attempt to show how confident he is of this, North Fork released
from a legal agreement that had prevented Fleet from making an offer for Dime while North Fork is trying to take it over. Fleet, often mentioned as possible buyer of Dime, is still agreeing to provide North Fork with $250 million to fund the cash element of North Fork's offer for Dime. Fleet is still prevented by the agreement from making a bid for North Fork.
In a press statement about the North Fork conference call, Fleet didn't say whether it was interested in acquiring Dime, and a spokeswoman for the bank declined to comment on the matter.
Fleet's finance chief, Eugene McQuade, said: "We continue to support North Fork in its tender offer for the Dime Savings Bank. The agreement we have with North Fork to provide $250 million of financing and to purchase 17 branches, if they are successful in their acquisition of Dime, remains intact. We believe it's now in the best interest of all involved for Dime and North Fork to reach a conclusion in this matter."
Dime made the following statement through a public relations executive at
. "Nothing we have heard today from Mr. Kanas changes our view that North Fork's proposal would provide wholly inadequate financial returns to Dime's shareholders
and it is rife with integration and execution risk."
On the subject of finding other bidders, Dime's statement continued: "We are making good progress in our comprehensive review of strategic alternatives and we will act in the best interest of shareholders."
"We have decided to release Fleet so that we can make the process complete," Kanas said on the call.
The combative chief executive claimed that Dime's senior management has declined to meet with North Fork to discuss a takeover, and he repeatedly called on Dime shareholders to support North Fork's bid. "It's time for Dime management to stop hiding and take their heads out of the sand," he said.
The call "was an opportunity
for Kanas to make a sales pitch to Dime shareholders," says Jim Ackor, an analyst at
, which hasn't done any underwriting for Dime or North Fork, and the brokerage rates them both strong buy.
Some observers had expected North Fork to up its offer price on the call. But with no other bank having yet made a rival bid, North Fork "would've been bidding against itself," says Kevin Timmons, banks analyst at
, which rates both banks buy and hasn't done any underwriting for either bank. North Fork is offering 0.9302 of its shares for one Dime share, plus $2 in cash.
North Fork announced its bid for Dime on March 5. At the time, Dime had proposed a merger with
. But Dime called off the Hudson deal on April 28, saying it was going to make "a comprehensive exploration of all strategic options."
Kanas' pressure tactics appear to have worked in his favor. The premium on Dime shares to North Fork's bid price declined further Wednesday. Dime's closing price of 16 3/4 is only 1.7% above North Fork's bid price of $16.476. A 3.3% gap existed between the banks' opening prices Wednesday, and nearly two weeks ago Dime's stock traded 11% above North Fork's offer price.
The following story was posted at 12:33 p.m. EDT:
North Fork-Dime Battle Set to Take Another Turn
could take a new turn Wednesday afternoon.
Melville, N.Y.-based North Fork Wednesday morning set a 2:30 p.m. EDT conference call on the bank's $1.85 billion offer for Dime. The call "has the potential to change the course of events," says John Kanas, North Fork's chairman and chief executive. He declined to elaborate. Dime, through its public relations firm, had no comment.
While no other banks have yet to publicly express an interest in buying Dime, speculation is intense that other institutions might try to better North Fork's bid price, which is currently 0.9302 North Fork shares plus $2 in cash. Possible white knights include
When asked for comment, an ABN Amro North America spokesman referred to comments from its chief executive, Harrison Tempest, earlier this month. Tempest said that while Dime had an interesting franchise, ABN Amro is focused on the Midwest. Citigroup and HSBC didn't immediately comment.
"I suspect Dime's negotiations with the white knights are intensifying and North Fork just wants to pre-empt those offers," says an East Coast bank stock hedge fund manager who requested anonymity. His fund doesn't have a position in shares of either bank.
One analyst thinks it's most likely that North Fork will announce an increase in its offer price. "Maybe they'll up the bid a little bit," says Kevin Timmons, banks analyst at
. "I spoke to North Fork Monday evening and they said they expected to fight the battle," adds Timmons. (He rates both banks a buy and his firm hasn't done any underwriting for either bank.)
North Fork's stock-plus-cash offer was worth $16.59 at noon Wednesday. That's still significantly below Dime's Wednesday stock price of 18 5/16, suggesting that the market expects North Fork to raise its price or another bank to offer more.