Among Wachovia Corp.s directors, only Morris W. Offit dissented when a vote was called to reaffirm a friendly merger agreement with First Union Corp. or reopen talks with SunTrust Banks Inc.
Mr. Offit has declined to talk about the matter publicly, beyond confirming his dissent, but that hasnt stopped SunTrust from deriving plenty of public relations value from his vote. That value only increased with the filing of proxy and other registration materials last week by First Union, in which new details on Wachovias May 22 board meeting were revealed.
According to First Unions filing Wednesday with the Securities and Exchange Commission, Mr. Offit indicated that he was dissenting based on disagreements with the process surrounding the termination of the discussions with SunTrust in December 2000.
More specifically, the filing says, Mr. Offit voiced his opinion that he was more comfortable with the SunTrust business model, which he viewed as more retail-oriented compared to the First Union model with its greater emphasis on capital markets activities; and his view that the cultural fit with SunTrust was better because of its focus on relationship-based banking while he regarded First Union as more focused on transactional-based services.
SunTrust, which has had little to cheer about since launching its hostile offer, is doing everything it can to piggy-back on Mr. Offits comments in the hope that his credibility in the industry, and stature on the board with 489,201 shares, he is the second-largest stakeholder among Wachovia directors will help turn the public relations momentum back in its direction.
In meetings with shareholders and analysts in the weeks since launching its $14.7 billion unsolicited bid for Wachovia a bid that would block the companys previously announced $13 billion agreement with First Union SunTrust has repeatedly hammered its belief that it would be a better cultural fit with Wachovia, using the same relationship-orientation argument Mr. Offit is said to have used during the May 22 Wachovia board meeting.
With his significant stock ownership in Wachovia, we believe Mr. Offit is the director whose interests are most clearly aligned with yours, SunTrust said in yet another letter, signed by chairman L. Phillip Humann and mailed to Wachovia shareholders Thursday.
Mr. Offits personal history is one investors could find compelling. A longtime New York banker, he was a general partner at Salomon Brothers in the 1970s, departing to form a money management firm that catered to high-net-worth individuals. That firm evolved into the New York-based trust company, OffitBank, which he sold to Wachovia in October 1999 for $200 million.
He is active on the charity circuit and a trustee at Johns Hopkins University, his alma mater. According to a proxy filed by Wachovia before it announced its agreement to merge with First Union, Mr. Offits term as a Wachovia director is set to expire next spring.
Since becoming part of Wachovia, OffitBank and Mr. Offit have remained relatively autonomous, analysts said. They are part of Wachovias broader asset management operation a key business line for the Winston-Salem, N.C., company and continue to work with the superrich.
Wachovias asset management operation can be best described by splitting it into three pieces. The bottom tier would be brokerage and mutual fund activities in branches; the second rung would involve specially designated personal financial advisers who work with customers who have $500,000 to $10 million to invest; and the top tier would be OffitBank, targeting customers with more than $10 million.
That exclusive club of customers tends to demand closer relationships with private bankers, analysts said. Some analysts said they agreed with Mr. Offits perception that SunTrusts asset management business had a better reputation for relationship management than First Union. Its all true, said Nancy Bush, an analyst at Ryan Beck & Co.
Reached by telephone at his Connecticut home Friday, Mr. Offit said he could not comment on his board vote or on any aspect of the ongoing battle for Wachovia. I have to keep very quiet, he said. I am not in a position to comment.
Wachovia spokesman Ed Hutchins said Friday that his company was preparing to mail proxies to shareholders in advance of the Aug. 3 meeting.
As to how he will cast his own votes at that meeting, Mr. Offit said: I dont even want to comment on that. It wouldnt be fair."