The rival bid for Greater New York Savings Bank-a bid that's a central issue now in a shareholder suit-came from North Fork Bancorp., according to a source close to the situation.
Brooklyn-based Greater New York, a $4.6 billion-asset thrift, wound up taking $7.3 billion-asset Astoria Financial Corp.'s offer. Greater New York told shareholders that another bid had come in the day after Astoria's, but declined to name the bidder.
The source would not reveal how much $6.6 billion-asset North Fork bid. Astoria's $293 million offer-$19 in cash or half a share of its own stock for each share of Greater New York's-was ultimately accepted by Greater New York's management and approved by shareholders two weeks ago.
The revelation of the identity of the second bidder comes just as the battle lines between Greater New York and two of its shareholders are being drawn.
Greater New York made a motion last week to dismiss a lawsuit filed in July on behalf of two of its shareholders. That lawsuit, which seeks class action status, alleges that Greater New York's top executives and directors failed to disclose in its proxy solicitation adequate information about the second bidder, including its name.
Greater New York's proxy, which was filed in June and circulated to shareholders in advance of a special meeting to vote on the deal, said only that a second offer was made by telephone to chairman Gerard C. Keegan on March 17, one day after Astoria's chairman, George L. Engelke Jr., met with Mr. Keegan to discuss his proposal.
Lawyers who are not involved in the case said the shareholders could have an uphill battle.
The target company in a merger has some leeway to determine the seriousness of a bid and is not obligated to list the specifics of an offer it has not accepted, attorneys said.
The key factors are whether the proxy solicitation contained enough information for shareholders to make an informed decision and whether information about any other bids would have made a difference in the long run, said Gil Schwartz, an attorney at Schwartz & Ballen in Washington.
Disclosing only the fact that another bid was made, without naming names, is common, the lawyers said.
They also said it would be extremely rare for a judge to stop a purchase that had already been approved by shareholders. "It would be going against what the shareholders have said they want," Mr. Schwartz said.
The two sides were scheduled to meet for the second time in federal court this week in Brooklyn to argue motions before a judge. The shareholders who brought the suit want the judge to issue an injunction to halt the purchase.
Greater New York Savings has said that it believes the allegations in the lawsuit are without merit.
