Magazine article American Banker

Clash at Michigan National Meeting Spurs Buyout Talk

Magazine article American Banker

Clash at Michigan National Meeting Spurs Buyout Talk

Article excerpt

An acrimonious annual shareholder meeting has revived merger Michigan National Corp.

After attending the meeting in Detroit, analyst Micheal K. Diana ofheal Prudential Securities Inc. put a "buy" rating on the stock, saying he was convinced that dissident shareholders have the mometum to force a sale.

"I've been saying a proxy fight wasn't going to be a winnder, but based on what happened yesterday, I know think a proxy fight is a winner," the merger and acquisition expert said.

Predicting a sale within 15 months, Mr. Dana put a 12-month target price on the stock of $80 and an 18-month target of $90. It closed at $65.25 Wednesday, up $1.50.

Although management prevailed in the only vote at the meeting -- the election of the board of directors -- Mr. Dana said the voting reflected significant shareholder dissatisfaction with the company's financial performance and share price.

The 26% of the shares oustanding that were voted against the board included those held by Mutual Shares. The largest of four Mutual Series Inc. funds, Mutual Shares recently disclosed its own 5% of the $6.9 billion-asset banking company.

Mr. Dana estimated that 30% of Michigan National's stock is held by institutional investors, who he said have become more "assertive" than in the past.

"If three-quarters of the remaining institutional holdings are added to the 26% that has already been voted 'no,' " he said, "then that would bring the number of around 40%. And that would be before active solicitation of votes from individual shareholders. …

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