A once-friendly rivalry between two Atlanta banks that cater to Asian-Americans has degenerated into a battle of tender offers.
For nearly three months $278 million-asset Summit Bank Corp. has been trying to persuade shareholders of Global Commerce Bank to sell their stock to Summit for $8 a share. Summit is hoping to gain enough shares to the acquire the $54 million-asset bank.
Both banks have repeatedly extended tender offers in hopes of winning over as many shareholders as possible. In a Jan. 31 press release Global said it had raised its buyback offer by 50 cents a share, to $8.50.
But so far Summit seems to have the upper hand. It reported last week that it had agreements to acquire 30% of Global's outstanding shares.
Global had said at the end of last month that it had offers for only about 5%. Reached this week, Global officials would not comment further.
Summit gained more ammunition last week when the Federal Reserve Bank of Atlanta approved its application to buy Global shares. The approval gives Summit the go-ahead to purchase the agreed-upon shares - and any additional shares stockholders pledge - before the offer expires at the end of the month.
"This is a significant step," said Gary McClung, Summit's chief financial officer. "We have been awaiting this since our application was filed in December."
Summit owns no Global stock but said many of Global's 200 shareholders are interested in selling to it. According to Georgia law, a company needs to own two-thirds of another's stock in order to acquire it. Mr. McClung said he is confident that Summit will reach that goal within the next few months.
Global's January release said that the Federal Deposit Insurance Corp. and the Georgia Department of Banking had given it permission to buy back stock, and that it would begin actually doing so this week. The tender offer expires today.
Global said in the release that it could afford to purchase 20% of the outstanding shares at $8.50. "The purchase of shares pursuant to the bank's offer is an attractive investment that will benefit both Global and our remaining shareholders as we continue to pursue our long-term objectives," chairman Alex Wu said in the release.
Pin Pin Chau, Summit's chief executive officer, said Friday that she was confident of prevailing.
"While Global's management repurchase plan is for 50 cents per share more" than ours, "their plan cannot accommodate the number of shares that have been tendered to us already, much less the shares that have been tendered to them," she said.
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