TEMPE, Ariz. - “Hostile takeovers” weren’t part of the credit union vocabulary until March 9, 2007, when the $1.9-billion Wings Financial Credit Union made a bid for the $199-million Continental FCU.
It was Continental FCU CEO Tom Glatt who immediately labeled the merger proposal a “hostile takeover” attempt.
The Apple Valley, Minn.-based Wings FCU had earlier solicited Continental FCU about a merger and had been rebuffed. In March, Wings Financial Credit Union moved to bypass the Continental board and take its offer directly to the members with an offer of $200 for each member if they voted for a merger with Wings. The $200 offer turned out to be against NCUA regulations.
The attempted takeover created a media storm and several misconceptions, according to Glatt. “People think that it’s over, but it isn’t over at all, Wings could try it again,” he said, crediting former NCUA Regional Director Alan Carver with doing the research that found Wings’ offer to pay $200 to each member out of Continental’s capital violated the rules.
“The biggest disservice of the attempted takeover was that it showed banks how they could do it. I’m not really afraid of Wings, I’m more afraid of banks,” said Glatt. “The $200 per member or $5 million would have come out of my capital; banks would come in with their own money.”
One silver lining: CFCU has accelerated its business plan, Glatt said.(c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com http://www.sourcemedia.com
