What may seem to be a bizarre twist in a months-long bidding war in upstate New York for Cohoes Bancorp is simple politics: Ambanc Holding Co. intends to support a rival's bid for seats on Cohoes' board in order to increase the chance of a victory by dissident shareholders.
A month after Ambanc let its tender offer for Cohoes expire, it has withdrawn its three nominees for Cohoes' board. Ambanc, of Amsterdam, N.Y., which has a 4% stake in Cohoes, of Cohoes, N.Y., said it would instead back the four nominees of Trustco Bank Corp., of Schenectady, N.Y., in an attempt to defeat incumbents.
Having seven nominees running against Cohoes' slate "would be divisive," said John M. Lisicki, president and chief executive officer of Ambanc. "We wouldn't like to increase the opportunity for the incumbents to be reelected."
Ambanc still has an informal offer on the table to buy Cohoes for $16 a share. In backing Trustco's nominees, Ambanc is betting that a less-entrenched board might be more amenable to other offers - including its own.
"At some point," said Kevin T. Timmons, an analyst at First Albany Corp., Cohoes "could come back and say, 'We've evaluated the alternatives and we're going to stay independent.' " Getting new directors on the board would be a way for Ambanc and Trustco "to hold Cohoes' feet to the fire," he said.
Ambanc and Trustco, which owns 1.3% of Cohoes' stock, each nominated individuals to Cohoes' board this year after their offers to buy the company were rejected. Both companies have been pursuing Cohoes ever since its announcement in April that it had agreed to merge with Hudson River Bancorp in Hudson, N.Y., a deal that collapsed in August.
Observers agree that Ambanc's withdrawal may aid Trustco's bid to land four of Cohoes' 11 board seats. The vote will be taken at Cohoes' annual meeting Nov. 30. "Trustco has a better chance now that there aren't two competing bids out there," said Richard D. Weiss, an analyst at Janney Montgomery Scott LLC in Philadelphia.
Foiled in its bid to merge with Hudson River, $739 million-asset Cohoes announced last month that it would try to sell itself to a larger company. Under that criterion, $711 million-asset Ambanc does not qualify.
"Ambanc's actions are irrelevant," said Harry L. Robinson, Cohoes' president and chief executive officer. "Our whole bent at this particular time is to get the highest and best price for shareholders."
Meanwhile, $2.3 billion-asset Trustco made an $18-per-share tender offer last week for Cohoes, and Cohoes called that inadequate. It is urging shareholders to reject the stock-and-cash offer, which it says is "risky" and funded with overvalued currency.
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