BOULDER, Colo., Oct. 14, 2008 (LAWFUEL) — The Shuman Law Firm today announced that it is investigating the proposed acquisition of Sovereign Bancorp, Inc. (“Sovereign” or the “Company”) (NYSE:SOV).
On Oct. 14, 2008, Sovereign announced their intent to sell the Company
to Banco Santander, a Spanish bank. Under the terms of the merger
agreement, Sovereign shareholders would receive $3.81 in cash for every
Sovereign share they tender, for a total sale price of approximately
$1.9 billion in cash. The proposed acquisition is subject to customary
conditions and regulatory approvals.
Santander purchased a 25% stake in Sovereign approximately three years
ago. Under terms of that agreement, Santander was entitled to bid for
Sovereign after May 31, 2008, but the Spanish bank had to offer at
least $40 a share. That provision was later amended to $38 a share.
These conditions were likely waived considering the $3.81 sale price.
This ownership stake also allowed Santander to control three seats on
Sovereign’s Board virtually guaranteeing a sale to Santander at
preferential terms. The $3.81 offer price provides no premium over
Sovereign’s close price of $3.81 on Friday, October 10th when rumors of
the proposed merger began to surface. In fact, Sovereign common stock
has traded as high as $10.23 in the past month. These facts, taken
together with other provisions in the merger agreement, may result in
damage to Sovereign shareholders by impeding the maximization of
shareholder value.
If you currently own Sovereign common stock and would like a free
consultation concerning your rights and interests, please contact Kip
Shuman, Esq. or Rusty Glenn, Esq. toll-free at 866-974-8626 or email
Mr. Shuman at kip@shumanlawfirm.com or Mr. Glenn at
rusty@shumanlawfirm.com.
