A small upstate New York thrift company has bought out a well-known activist shareholder who was suing over its refusal to sell itself to a rival.
Pathfinder Bancorp Inc. in Oswego said Monday that it had paid $2.3 million to the Wilkes-Barre, Pa., investment company Jewelcor Management Inc. for its 160,114 shares, a 6% stake.
Jewelcor is run by Seymour Holtzman, who agreed to drop a suit he had filed in November 2001, after the $258 million-asset Pathfinder rejected a $44 million takeover offer from Fulton Savings Bank of Fulton, N.Y.
Mr. Holtzman claimed in the suit that Pathfinder's board breached its duty to its shareholders by rejecting the bid, which worked out to $17 per share. He got $14.60 a share this week.
"Now that I've sold my shares there's no reason for me to continue" the suit, Mr. Holtzman said Tuesday. He said he had made a satisfactory profit on his seven-year investment, but he declined to say how much.
"I'm happy with the way things turned out," he said.
So is Pathfinder's president and chief executive officer. Thomas W. Schneider said Tuesday that the settlement lets the company focus on its business plan - which does not contemplate sale.
"I don't think mergers create value," Mr. Schneider said. "Value is only created when you are selling products to your customers." Pathfinder owns Pathfinder Bank, a five-branch savings bank.
Mr. Schneider said the settlement with Mr. Holtzman will not affect the repurchase plan Pathfinder announced Dec. 19. The company said then that it intended to buy back 102,000 shares by mid-June.
"I think it is important that we are fair to all our shareholders," Mr. Schneider said.
