First Fidelity Bancorp. wasn't the only suitor for Peoples Westchester Savings Bank, according to a proxy statement sent to Peoples' shareholders last week.
The document reveals that three other banks performed due diligence on Peoples and one submitted a merger proposal. The "other interested party" is not named in the proxy, but some Shareholders of the $1.7 billion-asset stock savings bank in affluent Westchester County believe it was Chemical Banking Corp. Chemical declined to comment.
The other suitor offered to acquire Peoples for a fixed price of $43 a share, slightly less than Fidelity's bid of $43.90, which is based on a formula tied to the value of First Fidelity's shares in mid-April, when the merger was announced. Peoples, which hired First Boston Corp. to aid in the evaluation, opted for the higher bid. The deal is expected to close later this year.
Some shareholders now believe they may have gotten a better deal with the lower bid because First Fidelity subsequently changed its purchase formula so that stockholders could end up getting less than $43.90.
The proxy also reveals First Fidelity's postmerger employment agreements with Peoples managers. The New Jersey bank gave William F. Olson a three-year term, during which he will receive an annual salary $475,000.
If Mr. Olson leaves the bank within one year of the merger, he will receive a lump-sum payment for the value of the remaining year's of the contract, health and life insurance for life, and other incentive pay.
