Sovereign shareholder asks regulators to block deals | VailDaily.com
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Sovereign shareholder asks regulators to block deals

NEW YORK – Opening a new front in a bid to block a pair of unpopular bank transactions, Sovereign Bancorp Inc.’s second-largest shareholder filed protests with federal and state banking regulators, asking them to reject the deals.Franklin Mutual Advisors LLC, which owns nearly 5 percent of Sovereign’s stock, sent letters Thursday to the Office of Thrift Supervision, the Federal Reserve Bank of New York and the New York State Banking Board.The letters urge the regulators not to allow Philadelphia-based Sovereign to sell a a 19.8 percent stake to Spain’s Grupo Santander for $2.4 billion in cash and buy Independence Community Bank Corp. in Brooklyn, N.Y., for $3.6 billion.The planned transactions have enraged shareholders, who view the deals as designed to insulate Sovereign’s management and board. Sovereign’s largest shareholder, asset-management firm Relational Investors LLC, has taken the lead in opposing the deal, and wants to replace Sovereign’s board.In Thursday’s letters, Franklin Mutual, of Short Hills, N.J., argues that Sovereign’s motives in crafting the deals, as well as its handling of the controversy, “raise extremely serious concerns about how Sovereign is being managed and how it will be managed in the future.”As a result, Franklin Mutual says, regulators shouldn’t let the deals go through.A Sovereign spokesman wasn’t immediately available to comment Friday.Franklin Mutual’s appeal to the bank regulators follows shareholders’ unsuccessful pleas to the New York Stock Exchange to force Sovereign to let investors vote on the deal.Vail, Colorado


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