The proxy battle at Compass Bancshares attained new heights of acrimony last week when bank management labeled as "another dirty trick" a videotape being circulated by a dissident director.
Compass chairman and CEO D. Paul Jones Jr. made the comment Friday about a tape mailed out to shareholders by Harry B. Brock Jr., who is struggling to depose Mr. Jones and win control of the Compass board.
The 20-minute-long video begins with Mr. Brock explaining why he believes Compass should be sold. The video also juxtaposes comments Mr. Jones made during a taped court deposition March 24 with footage taken several weeks earlier at an employee gathering.
Mr. Jones had told the employees he thought Compass, which has $9.1 billion of assets, should remain independent for now. But during the deposition, he admitted discussing a possible "merger of equals" with Birmingham, Ala.-based Regions Financial Corp., which has $12.8 billion of assets.
In the written transcript, Mr. Jones described this as "a very tentative discussion" that "never really went anywhere much."
But Mr. Brock, seizing on the merger talks as a way to embarrass Mr. Jones, has mailed out 5,000 tapes to Compass shareholders.
"I think the Regions thing is dynamite," Mr. Brock said, noting that an in-market deal would provide less up-front premium to shareholders than selling to an out-of-state acquirer.
Mr. Jones cried foul.
"It is a sad commentary on Mr. Brock's desperation that he must resort to yet another dirty trick," Mr. Jones said.
He also asserted that it was Mr. Brock himself who had inspired the discussions with Regions. Mr. Brock said his only role had been to advise a Regions director, who introduced the topic, to contact Mr. Jones directly.
A transcript of Mr. Jones' deposition shows that the Compass CEO discussed a possible deal with Regions chairman and CEO J. Stanley Mackin at Mr. Mackin's home in January.
Mr. Jones also testified that the Compass board had authorized him to continue the talks, which lapsed after Mr. Brock went public with his proxy challenge Jan. 27.
Compass shareholders are to vote at their annual meeting April 11 on whether to elect three new directors supported by management or an alternate slate nominated by Mr. Brock.
