Cathay General Bancorp Inc. of Los Angeles has received approval from the New York State Banking Department to acquire up to 100% of the shares of the $310 million-asset Great Eastern Bank in New York City.
The approval appears to clear the way for the $6 billion-asset Cathay, the holding company for Cathay Bank, to block a competing bid for Great Eastern by the $7.3 billion-asset UCBH Holdings Inc. of San Francisco.
Having obtained the New York regulator's approval, Cathay says it now has all the approvals it needs to begin buying shares. It says it holds binding commitments to buy 41% of Great Eastern's stock for a total of $28 million. Under New York law, UCBH needs the support of two-thirds of the shareholders for its $103.3 million offer to succeed.
Last week Cathay received the Federal Reserve's approval to buy Great Eastern stock.
All three companies focus on Asian-American small-business owners.
Cathay obtained the options to buy the 41% stake after soliciting Great Eastern's shareholders directly this fall. But its action so angered Great Eastern's directors that they solicited UCBH, which made its bid in October.
Cathay responded with an offer to buy all of Great Eastern for $112 million, but the New York bank's management has continued to back UCBH's bid, saying the difference between the two offers would be offset by the breakup fee Great Eastern would have to pay UCBH.
