NEW YORK - Institutional Shareholder Services said Tuesday it is recommending that shareholders withhold votes from Dime Bancorp's five nominees for the board of directors at its annual meeting Friday.
ISS, an independent proxy-advisory firm, said Dime should give fair consideration to a hostile takeover offer by North Fork Bancorp. Four months ago, North Fork launched a stock-and-cash bid that at the time valued Dime at $17 a share, or $1.89 billion.
The bid derailed Dime's announced merger-of-equals with Hudson United Bancorp, but Dime has continued to stiff-arm North Fork's advances. This month it announced a $238 million investment by private equity firm E.M. Warburg Pincus and its affiliates. Dime said it "vigorously" disagreed with ISS' recommendation, saying in a statement Monday that ISS "failed to realize the substantial benefits" of Dime's agreement with Warburg Pincus.
Warburg plans to acquire as much as 22% of the New York thrift company by purchasing both stock and warrants. At the same time, Dime named Anthony Terracciano chairman, succeeding Lawrence J. Toal, who remains chief executive.
North Fork hasn't proposed an alternative slate of directors, having failed to meet the deadline for submitting nominees. Instead, it has sought to pressure Dime shareholders to withhold votes from Dime's five nominees.
If shareholders support Dime management and elect the nominated directors, North Fork will withdraw its tender offer, said people familiar with North Fork.