Adding another twist to an already intriguing hostile takeover story, the executive who ran the New York bank that was targeted is defecting to the losing bidder.
William J. Laraia has been hired by UCBH Holdings Inc., which lost a five-month long bidding war for Great Eastern Bank to Cathay General Bancorp of Los Angeles.
Cathay closed its $101 million deal for Great Eastern on April 7. Three weeks later UCBH hired Mr. Laraia as an executive vice president overseeing the $8 billion-asset San Francisco company's expansion in the New York market. He starts Monday.
Currently, UCBH has four branches in the New York area, but officials have said that it would like to open more, or buy one of the nine other privately owned Chinese-American banks based there.
A spokeswoman for UCBH said Mr. Laraia and other executives were not available for interviews, but Thomas S. Wu, its president and chief executive officer, said in a press release announcing the hiring, "With over 30 years of solid … banking background, Mr. Laraia's experience and expertise will be very valuable to our expansion strategy in the New York market."
Heng Chen, the chief financial officer of the $6.9 billion-asset Cathay, would not say whether Mr. Laraia was asked to leave or left on his own.
"We prefer to have him speak for himself," Mr. Chen said Thursday in an interview.
Analysts said they were not surprised by Mr. Laraia's move to UCBH.
When Cathay informed Great Eastern's board in September that it had made a deal with some of their shareholders to buy 41% of the stock - with the intention of acquiring the rest - Mr. Laraia persuaded the board to seek a white knight, analysts said.
UCBH made its offer in October, but Cathay countered with a higher bid - and a threat to vote its shares against the UCBH offer.
Great Eastern's board chose Cathay's bid, but Lana Chan, an analyst at Bank of Montreal's Harris Nesbitt Corp., said Mr. Laraia was never in sync with the new owners.
"Clearly, he had on ongoing row with Cathay after the deal closed, and I think part of the reason that UCBH hired him" was because its management expects "he'll also bring some of his contacts with him," Ms. Chan said. "Whether Cathay will be aggressive in retaining those relationships is another thing, though."
Brett Rabatin, an analyst at First Horizon National Corp.'s FTN Midwest Securities Research Corp. in Nashville, said there is room for both Cathay and UCBH to grow in New York.
"There's a lot of money there, and Cathay's looking to double its lending staff," Mr. Rabatin said. "UCBH is also looking to grow talent in the area, so it's a win-win for both of them."
Cathay is expected to finish integrating the $330 million-asset Great Eastern next quarter.
Mr. Chen said that Cathay has no immediate plans to open additional branches. "We have nine branches now in the areas with the largest Chinese concentration, so we expect to grow well."
As for buying another Chinese-American bank, "we're keeping our options open," he said.
