A shareholder advisory firm has once again thrown cold water on an attempt by investor H. Jerry Shearer to force a sale by a Southeast thrift - this time in Virginia.
Institutional Shareholder Services said Cenit Bancorp shareholders should vote against both Mid-Atlantic Investors' slate of three directors and the sale of the Norfolk-based company.
"Obviously, it's very helpful whenever an independent agency endorses your strategic plan," said Michael S. Ives, Cenit's president and chief executive officer.
Cenit officials released the findings of the April 8 Institutional Shareholder Services report last Friday, just days after Palfed Inc., Aiken, S.C., announced an Institutional Shareholder Services report supported its position in its proxy fight.
In both cases, Institutional Shareholder Services, a Bethesda, Md.-based company, recommended against Mid-Atlantic's overtures to force the sale of the companies. Both companies face proxy fights next week: Palfed's annual meeting is scheduled for Tuesday and Cenit's the following day.
Mr. Shearer, managing partner of Columbia, S.C.-based Mid-Atlantic Investors, said he couldn't comment because he had yet to read the Cenit report. He did reiterate, however, that he thinks Institutional Shareholder Services consistently supports management's position.
Mid-Atlantic owns a 9.7% stake in Cenit, which has $707 million of assets.
As spokesman for Institutional Shareholder Services, which evaluates proxy fights for institutional investors, again said the firm determines its position on a case-by-case basis.
In the Cenit fight, Institutional Shareholder Services said Cenit might be able to attain a higher price if it's allowed to continue with its current growth strategy. The independent firm said it didn't see any signs of management "trying to entrench itself at the cost of shareholder value."
"We believe that management is open to a potential merger of Cenit with a larger bank at some time in the near future," the report said.
