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Dime Bancorp Disagrees with ISS's Recommendation and Highlights Substantial Benefits of Warburg Pincus Investment

Strategic Insights

— 2 min read

Dime Bancorp, Inc. has issued a statement in response to Institutional Shareholder Services Inc.'s (ISS) report, vigorously disagreeing with ISS's recommendation on the company's agreement with Warburg Pincus. The company highlights the substantial benefits of the agreement, including a compelling opportunity to increase stockholder value for Dime shareholders. Dime stockholders are being given a choice between two value-producing alternatives: tendering into the Dutch Auction and receiving cash value consistent with, if not superior to, the uncertain and risky value in North Fork's proposal or remaining invested alongside Warburg Pincus.

Key Takeaways:

  • Dime Bancorp disagrees with Institutional Shareholder Services Inc.'s (ISS) recommendation on the company's agreement with Warburg Pincus, citing substantial benefits and a compelling opportunity to increase stockholder value for Dime shareholders.
  • The company highlights that Dime stockholders are being given a choice between two value-producing alternatives: tendering into the Dutch Auction and receiving cash value consistent with, if not superior to, the uncertain and risky value in North Fork's proposal or remaining invested alongside Warburg Pincus.
  • Dime's management and board, including Tony Terracciano, are committed to implementing an accelerated growth strategy that will produce superior returns for Dime stockholders, while preserving the opportunity to attract a control premium for Dime shares in the future.
  • North Fork's proposal has been met with skepticism, with the company's stock underperforming the S&P Regional Bank index by 20% since the proposal was made.
  • The weakness of North Fork's proposal is demonstrated by its low tender rate, with only 17% of Dime shares tendered into the offer as of June 27, 2000.
  • Dime will continue to evaluate strategic opportunities as they become available, with the goal of producing superior returns for stockholders.

Statistics:

  • 20%: the underperformance of North Fork's stock against the S&P Regional Bank index since the proposal was made.
  • 17%: the low tender rate for Dime shares into North Fork's exchange offer as of June 27, 2000.
  • March 21, 2000: the date on which Dime filed its solicitation/recommendation statement with the Securities and Exchange Commission regarding North Fork's hostile exchange offer.

Sources:

  • Institutional Shareholder Services Inc. (ISS)
  • Dime Bancorp, Inc. - press release
  • Dime Bancorp, Inc. - Schedule 14D-9 filing with the Securities and Exchange Commission (March 21, 2000)
  • Dime Bancorp, Inc. - proxy statement relating to the 2000 annual stockholders meetings
  • Dime Bancorp, Inc. - tender offer statement on Schedule TO (when filed with the Securities and Exchange Commission)

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