On Dec. 9, American Banker published an opinion article defending Sovereign Bancorp Inc.'s effort to sell an equity stake and use the proceeds to buy a banking company. The article, "Attacks on Sovereign Unfair, Short-Sighted," was written by Ben A. Plotkin, chairman of investment bank Ryan Beck & Co., which is owned by BankAtlantic Bancorp Inc.
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That opinion piece is at the center of a skirmish in Sovereign's fight with a dissident shareholder, Relational Investors LLC. Relational - which opposes the acquisitions - said last week that it had asked the SEC to probe "misleading" conduct by Sovereign regarding the article.
Relational cited a Dec. 15 letter to shareholders from Sovereign's chairman, Jay Sidhu, that included a reprint of the article. Relational said an author's note following the article should have disclosed Ryan Beck's "long-standing" business relationship with Sovereign; the note said Ryan Beck "was not involved in the Sovereign transaction but publishes equity research on numerous regional and community banks, including Sovereign."
Last Friday American Banker reported details of Relational's complaint in a brief news story that included the information that Mr. Plotkin had submitted the unsolicited article for publication and had provided the contents of the author's note. We have since asked Ryan Beck to provide fuller disclosure. Below is the full text of Ryan Beck's statement, which we received Tuesday.
American Banker welcomes all perspectives; its news and opinion pages will continue to cover Sovereign and its shareholders.
Ryan Beck's financial institutions group has been providing investment banking services to community banks and thrifts for more than three decades. The 30-member financial institutions team has over two centuries of combined industry experience.Ryan Beck offers a full range of financial advisory services, including buy-/sell-side advisory, balance-sheet restructuring, due-diligence assistance, fairness opinions, and feasibility studies. Past financing solutions for clients include the use of equity, debt, trust-preferred, and hybrid securities.Through its distribution platform, the firm assists banks in selling their securities to both retail and institutional investors. The firm is also a leading specialist in providing mutual-to-stock conversion analysis and transaction assistance.
Ryan Beck has been engaged by Sovereign Bank in the following capacities: From 1997 to 2002 the firm served as a non-lead, co-manager in public offerings of securities. Prior to 2002 the firm provided other types of financial advisory services.Ryan Beck has performed investment banking services for banks that have subsequently been acquired by Sovereign, but no fees were paid to Ryan Beck by Sovereign in connection with those assignments.Ryan Beck was not involved in any capacity in the transaction involving Sovereign, Banco Santander, and Independence Community Bank Corp.Ryan Beck presently has no investment banking relationship with Sovereign Bancorp but is entitled and qualified to seek or accept such a relationship in the future.Ryan Beck currently serves as a market maker in 476 bank and thrift stocks, and Sovereign Bancorp is included in that group. In that capacity, Ryan Beck may either be long or short any of those stocks, including Sovereign's stock, at any given time.Ryan Beck has no other material business relationship with Sovereign or its management.Ryan Beck's research department publishes independent opinions on 99 community banks and thrifts, including Sovereign Bancorp. This research is widely disseminated to news sources at time of publication, and available to the public upon request, at www.ryanbeck.com.Ryan Beck's most recent research report on Sovereign was published on Dec. 20, 2005. (Ryan Beck provided its three most recent reports on Sovereign, which are are linked below.)Ryan Beck's chairman and CEO, Ben Plotkin, has never publicly expressed, and does not publicly express, his personal views regarding the investment merits of any financial institution. He is a longtime shareholder of Sovereign Bancorp.Ben Plotkin's consent was not sought by Sovereign Bancorp prior to its decision to distribute his American Banker op ed article to its shareholders.Related Ryan Beck Research Reports
SOV: Calculating the Risks, Maintain Market Perform (PDF)
SOV: 4Q05 Preview, Fundamental PerformanceNeeds to be There (PDF)
SOV: NYSE Approves Sovereign/SantanderTransaction Assuming Modest Concessions (PDF)
