Green Point depositors barely approve IPO.

Green Point Savings Bank revealed Tuesday that its depositors had only barely approved a plan to convert the nation's largest mutual thrift to public ownership.

The New York City thrift's management also rejected a request by the state banking regulator to extend today's deadline to buy stock issued under the conversion.

Green Point, which has $6.4 billion in assets, announced Friday that its depositors had approved the conversion but declined to specify the margin.

2 Requests from State

Then the New York State Banking Department asked the Brooklyn-based thrift to disclose the results and to extend by 30 days the deadline for subscribing for stock.

Green Point complied with the first request late Monday, announcing that it had won 75.8% depositor approval for its stock conversion plan, just over the 75% needed. But it refused the second request, saying that depositors who wanted to buy stock would have until noon today to do so.

Kip A. Weissman, a partner in the Washington-based law firm Silver, Freedman & Taff, said the depositors' vote "shows a higher level of depositor resistance than in the past, but it also shows that over three-quarters of the depositors supported them ovr a fairly well-financed opposition effort" by Republic New York Corp.

Hostile Bidder

Republic had made a hostile takeover offer for Green Point.

The conversion also attracted attention because of the lucrative package of $21 million in stock and $26 million in stock options that Green Point's trustees and management stand to win in the deal. Thomas S. Johnson, the thrift' chairman and chief executive, would get $2 million in Green Point stock free of charge plus options to buy $4 million more over 10 years.

Mr. Johnson could not be reached for comment.

A spokeswoman for the state banking department said of Friday's vote: "It was a very, very slim margin, which shows the problems which came up, and I would suspect that is one of the reasons we are reviewing the whole proxy solicitation process."

A Request, Not an Order

But she stopped short of saying the thrift was defying its regulator by going ahead with the stock sale. "We said, |Don't make the cutoff date the 15th,'" the spokeswoman said. "We didn't order them; we asked."

Green Point customers with at least $10 on deposit were entitled to one vote on the stock conversion for every $100 on deposit, up to a maximum of 1,000 votes. On Friday, 25,138,996 votes were cast - 49.1% of votes eligible. Of those, 19,054,827 votes - or 75.8% - were cast for the stock conversion, and independent tabulator reported.

If 201 more customers with large deposits had voted against the plan, it would have failed.

The state banking department will hold hearings on Green Point's plan to sell up to $786 million in stock but has not yet set a date. It plans a "fact-finding investigation" on whether the thrift's appraisal, disclosure, and proxy solicitation process were fair.

Banking Superintendent Derrick D. Cephas said in a statement Tuesday: "The department is attempting to expedite the resolution of its concerns but will be hindered in its inquiry until it receives all the materials it has requested" from Green Point. He was not available for further comment.

The state regulator approved, but did not endorse, Green Point's disclosure and appraisal earlier this year; it has not explained what questions it now has on the matter. However, regulators ordered Green Point Nov. 24 to stop resoliciting depositors who had voted againts the stock conversion.

A thrift lawyer who requested anonymity said the regulator's actions have been confusing. "New York has just been spraying paint blotches all over the canvas for a month on this thing," the lawyer said, "and I still don't see what the picture is that they are trying to draw."

The state banking spokeswoman said, "There is nothing confusing about it."

Despite regulators' questions on the stock conversion, the thrift is plowing ahead, trying to get its deal done. Regulators will not allow Green Point to sell the stock until its questions are answered, but the thrift is taking orders and accepting checks for the stock now.

"Green Point is taking a lot of heat, but they know they have to jump through a ring of fire anyway," Mr. Weissman said. "They are already halfway through it, so they might as well keep going."

Depending on how many investors want to buy the new stock, Green Point will sell from $583 million to $786 million worth at $11.10 to $15 per share.

Thrift lawyers said Green Point is eager to close the deal today instead of extending the offer for 30 days because regulators have said the appraisal may be too law.

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