Hanover Kills Shareholder Discount
Manufacturers Hanover Corp. will no longer sell stock to shareholders through its dividend reinvestment program at a 3% discount to the market price, the bank announced.
The program is being changed because of Hanover's impending merger with Chemical Banking Corp. Shareholders will still be able to purchase shares through the program, but they will have to pay market rates.
An Alignment with Chemical
A spokesman said Hanover wanted to bring its program in line with Chemical's.
Chemical used to let investors buy shares at a 5% discount but killed the feature last year. Arbitragers were said to be pushing Chemical's stock price around by selling short during the periods when the price for dividend reinvestment was being set, then buying at a discount to the already low price using the dividend reinvestment program.