Mellon Bank Corp., which this spring fended off a hostile bid by Bank of New York Corp., is leading a crusade to toughen Pennsylvania's anti- takeover statutes.
The Pittsburgh-based banking company was instrumental in drumming up support for legislation that would give the state banking department stronger powers to intercede in attempted takeovers of Pennsylvania banks with deposits in excess of $10 billion.
The state Senate approved the measure June 9 by a 43-to-5 vote.
Sen. Ed Holl, chairman of the state Senate Banking Committee, said the amendment-which hit the floor on the last day of the Legislature's session- was drafted to "protect the loss of our remaining two world-class banks."
Actually, the measure would impact three Pennsylvania banks: Mellon, PNC Bank Corp. of Pittsburgh, and Sovereign Bancorp of Wyomissing.
But Mellon was the only one to lobby for its adoption.
"We believe the legislation is good for the state," said Steven Dishart, a spokesman for Mellon.
A spokesman for PNC said it would remain neutral and did not consider the legislation to be vital to the bank's interests. PNC, like Mellon, has long been considered a prime takeover target of out-of-state banks.
"We would not stand in their way, but we do not feel that we need it," said PNC spokesman Jonathan Williams.
Jay S. Sidhu, president and chief executive officer at Sovereign, said he opposed the amendment on philosophical grounds.
"It's unnecessary," Mr. Sidhu said. "You have to earn the right to remain an independent company. It's free enterprise. You don't need government interference."
Even the state's industry trade group is distancing itself from Mellon.
The Pennsylvania Bankers Association officially opposes the measure because it gives state banking regulators a stronger voice in merger approvals, said Dan Reisteter, director of government relations for the trade group.
"Our concern is the precedent it would set," Mr. Reisteter said. "It creates the potential for politicizing bank transactions."
Bank of New York, which rescinded its offer for Mellon on May 20, had no comment.
Sen. Holl said the motivation for the legislation came from the bitterly contested $16.6 billion takeover of Philadelphia-based CoreStates Financial Corp. by Charlotte, N.C.-based First Union Corp.
Over 7,000 CoreStates employees were slated to lose their jobs in that deal, which was completed in April despite heavy opposition from Pennsylvania community groups.
"We are concerned about loss to Pennsylvania as industry moves out," Sen. Holl said.
The amendment must still be considered and approved by the state House of Representatives. The Legislature is scheduled to reconvene Sept. 28.