Friendly competition has turned hostile in Atlanta's Asian-American banking community.
Global Commerce Bank, with $52 million of assets, filed a lawsuit Monday in the U.S. District Court in Atlanta that attempts to block an unsolicited takeover by Summit Bank Corp.
Last month several Global stockholders agreed to sell what amounted to 35% of Global's stock to Summit for an undisclosed sum. In a Securities and Exchange Commission filing on Dec. 5, $269 million-asset Summit made an official tender offer of $7.50 or $8 per share.
Global alleges that Summit violated federal securities laws by issuing two illegal tender offers. But Pin Pin Chau, Summit's chief executive officer, argued that the company made only one tender offer, and that there was nothing illegal about it.
According to Ms. Chau, the first agreement was reached after she heard that a group of Global shareholders was interested in selling its stake to Summit. She added that another group of shareholders, which owned 50% of the stock, had expressed interest in selling earlier this year, but no agreement was ever reached.
"We are bigger, have more capital, and are publicly traded," Ms. Chau said. Global's shares "do not have liquidity, and people that want to exit need a way to exit."
Both Summit, based in Atlanta, and Global, based in suburban Doraville, cater to Asian-Americans and provide international trade financing. They had been friendly competitors since Global opened its doors in 1995, according to officials at the two banks.
Summit, the parent company of Summit National Bank, is looking to purchase Global and use the additional resources to expand into other ethnic markets, but its management has shown no interest in selling.
Global is asking the court to block Summit's agreement with its shareholders and prohibit Summit from soliciting any more Global shareholders until the tender offer dispute is resolved. Global also announced this week that it plans to repurchase at least $2.5 million of its own stock.
"We are asking the Court to release each of these shareholder from their agreement so they will be allowed to make an informed investment decision once they have received an offer that contains all the information necessary for them to make such a decision," Global's chairman, Alex Wu, said in a prepared statement.
Mr. Wu declined to comment further.
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