Bank of New York Co.'s bold bid for Mellon Bank Corp. recalls its aggressive campaign a decade ago to acquire Irving Bank Corp.
That acquisition, which also began as a public "bear hug" in September 1987, vaulted Bank of New York into the prominent competitive position it occupies today.
But the deal was sealed only after more than a year of intense wrangling that included a bitter court fight, Irving's futile search for a "white knight" friendly buyer, and an acerbic proxy contest that Bank of New York narrowly lost.
Irving finally conceded defeat only after part of its poison pill defense was invalidated by an appellate court and Bank of New York sweetened its bid a final time, to $1.4 billion.
Former Irving staffers have since held reunions on Oct. 10, the day in 1988 when their company, headquartered at One Wall St. in New York's financial district, gave up its independence.
That event still stands as the most successful hostile takeover ever done in the banking industry and opened the way for other such efforts - few of them successful.
In the most comparable recent case, Wells Fargo & Co. has required two years to recover its balance after a successful, unfriendly takeover of First Interstate Bancorp. Its reputation has been tarnished, and it may end up as takeover prey itself.
In fact, hostile bids have been rare and appear to be governed by the law of unintended consequences. Unwelcome bids have driven targets into the arms of rivals or hastened the arrival of powerful new competitors.
In 1987, the year that Bank of New York launched its bid for Irving, Marshall & Ilsley Corp. of Milwaukee tried the same tactic on local rival Marine Corp. Marine turned to Banc One Corp. as a white knight, ushering the Ohio superregional into Wisconsin.
That same year, Centerre Bancorp., St. Louis, spurned a bid from United Missouri Bancshares, seeking to expand from its Kansas City base. Centerre ended up being acquired by Boatmen's Bancshares, now part of NationsBank Corp.
In 1991 Cleveland's National City Corp. made a bid for rival Ameritrust Corp. After entertaining a parade of bidders, Ameritrust sold out to another major Cleveland bank, Society Corp., which has since joined with KeyCorp.
Even failed bids sometimes have lasting effects. Cincinnati's Star Bancorp. shunned an unwelcome 1992 bid from neighboring Fifth Third Bancorp. Hurt feelings reportedly lingered for several years.
Occasionally, failure has led to success. After NationsBank, then NCNB Corp., made an unsolicited $2.4 billion bid for Citizens & Southern Corp. in April 1989, the Atlanta banking company defensively joined forces with Virginia's Sovran Financial Corp.
Just two years later, in July 1991, NationsBank seized the opportunity to buy the combined entity, C&S Sovran, in a friendly $4.3 billion deal that then ranked as the industry's largest.
