Magazine article American Banker

1st Failed Courtship Fails to Sour Meridian Chief on Expansion Plans

Magazine article American Banker

1st Failed Courtship Fails to Sour Meridian Chief on Expansion Plans

Article excerpt

THE $5.8 BILLION-ASSET Meridian Bancorp Inc. isn't accustomed to the role of spurned suitor. In previous incarnations under various names, the holding company has wooed and won 23 banks since 1952 -- all without a rejection, in public least.

But early in October, the Commonwealth National Financial Corp., a $1.3 billion-asset Harrisburg bank holding company, which Meridian viewed as a perfect marriage, said yes to the $30.5 billion-asset Mellon Bank Corp. of Pittsburgh instead.

"We tried," says a "very disappointed" Samuel A. McCullough, 47, president and chief executive officer. "Now we're going on to the next one."

MEllon's cash-and-stock bid of $40 topped Meridian's offer of $39, all in stock, which Mr. McCullough had called an "extraordinary premium." Because the Mellon cash could be taxable, the Meridian president feels his tax-free stock might have been a better deal for Commonweath shareholders.

"We were not in a bidding contest with Mellon," he says.

In the end, Mr. McCullough learned about Commonwealth's decision to go with Mellon from a former colleague -- J. David Barnes, chairman and chief executive of Mellon. Mr. McCullough was a Mellon vice president when, in 1975, he joined what would become Meridian.

Commonwealth gives three reasons for choosing Mellon: higher price; the more sophisticated services and greater career opportunities for staff that a bigger bank offers; and Mellon's agreement to let Commonwealth keep its name and make local decisions, though Mr. …

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