BONY Plans Mellon Shareholder Meet
Apr. 27, 1998
PITTSBURGH (AP) _ Mellon Bank Corp.'s board of directors backed chairman Frank Cahouet by unanimously rejecting an unsolicited $23 billion takeover bid from Bank of New York.
``The board unanimously determined that a merger of our two organizations would not be in the best interests of Mellon or its shareholders, customers, employees, communities and other constituencies,'' Mellon said Sunday.
Bank of New York officials will meet this week with Mellon shareholders, hoping they can convince Mellon's board to reconsider, spokesman Paul Leyden said today. He reiterated that Bank of New York will not pursue a hostile takeover by taking its offer directly to shareholders or trying to oust Mellon's board.
Bank of New York has said its offer has received ``overwhelming support and enthusiasm'' from shareholders.
In its letter Sunday to Bank of New York chairman Thomas Renyi, the Mellon board cited its planned emphasis on asset management and mutual funds, personal trust and consumer financial services.
``While BONY certainly has strengths in its primary businesses, '' the letter said, ``(it) has neither a significant presence nor a noteworthy record of success'' in those areas.
Bank of New York has strong operations in securities processing besides its large retail banking franchise. Mellon also has a large retail operation as well as corporate banking and asset management.
Bank of New York on Wednesday had offered 1.4 shares for every Mellon share, an attempt to get around Cahouet's previous rejection of Renyi's overture.
Mellon also has sued to try and block the deal, contending that Bank of New York used confidential information obtained in failed merger talks last fall.
With the bid, Bank of New York was racing to keep up with rivals that are broadening their geographical presence and their ability to offer a variety of financial services under one roof.
``We believe that nothing has changed since we determined to terminate discussions with you in December,'' Mellon's letter said. ``Merging simply for the sake of achieving greater size is not good business and is certainly not good public policy.''