A Southern California bank, under fire from well-known activist Michael Price and other investors, is making it more difficult for dissidents to put their agenda before other shareholders.
Anaheim-based SC Bancorp has amended its bylaws to make dissidents go through the board before soliciting shareholders' consent to any proposals without going through an annual meeting.
The move-which requires hostile shareholders to request a record date from the board before mailing solicitations to other shareholders-will force Basswood Partners to jump through one more hoop in its campaign to force change on SC. Setting a "record date" means that only those owning shares as of that day can vote.
Paramus, N.J.-based Basswood, which owns 9.77% of SC's stock, has stated publicly that the company is not delivering adequate returns to shareholders and should be sold. The firm is seeking to expand the bank's board and add three independent directors, including a Basswood general partner.
"The board's action is in no way designed to thwart the ability of shareholders to take actions in lieu of a meeting," said SC chairman Harold A. Beisswenger. "Instead, the board's actions are merely designed to ensure that consideration of our strategic alternatives be conducted in an orderly fashion."
In a separate move, the bank announced that its board is in fact "considering strategic alternatives," together with an unnamed financial adviser retained during the fourth quarter of 1996.
Officials stressed in a press release and in an interview that they are considering all options, including a possible sale of the $476 million- asset company. They noted, however, that there is no guarantee any deal would be reached.
Bennett Lindenbaum, Basswood general partner, said he was heartened by the bank's intent to look at other options, and said he didn't view the by- law change as "an aggressive or hostile act on their part."
The dual announcements by the bank Monday came two weeks after Basswood submitted to the Securities and Exchange Commission its proposed consent solicitation, asking shareholders to support changes in the board.
Mr. Price, whose Franklin Mutual Advisers fund owns another 5.4% of SC, has publicly backed Basswood's efforts. Mr. Price is known for pushing Chase Manhattan and Michigan National corporations to sell during the past two years.
"It looks like this is the beginning of the typical cat-and-mouse game," said Jonathan D. Joseph, partner at Pillsbury Madison & Sutro LLP, a law firm in San Francisco. "It's the typical cookie-cutter approach that you see from companies when they're under attack."