Combination Would Create a Stronger Locally Based and Managed Bank for Hawaii
Largest CB Shareholder Expresses Support
HONOLULU, April 16 /PRNewswire-FirstCall/ -- CPB Inc. (NYSE: CPF) ("CPB"),
parent company of Central Pacific Bank, announced that it has formally
proposed to the management and board of directors of
CB Bancshares, Inc. (Nasdaq: CBBI) ("CB") a merger of the two companies to
create a leading, locally based and managed financial institution dedicated to
serving Hawaii's consumers and local businesses. The proposal includes a
70 percent stock and 30 percent cash offer for all outstanding shares of
CB which, based on the April 14, 2003 closing stock price for CPB, is worth
approximately $285 million, or $70 per share, to CB's shareholders. The
proposed combination is expected to be accretive to earnings per share in the
first year following the close of the transaction.
CPB accompanied its public announcement of this proposal with a renewed
call for a negotiated transaction between the two companies, but indicated it
was prepared to take the proposal directly to the shareholders of both
companies. CPB has attempted several times to begin collaborative discussions
between the two banks about a combination that would enhance their ability to
serve Hawaii's consumers and businesses. A copy of CPB's proposal accompanies
this press release.
Jiro Shirai, Director of TON Finance, B.V. ("TON"), CB's largest
shareholder stated: "TON Finance supports the $70 per share offer made by CPB
for CB. TON Finance believes the offer is an extremely attractive proposition
for CB's shareholders, and that the merger of these two Hawaii banks is a
logical step forward and should create a much stronger institution."
TON has agreed to vote 295,587 shares of its CB common stock in favor of
the merger, a possible tender exchange offer, and other proposals that may be
made to facilitate the transaction. Added to the 88,741 CB shares CPB owns,
this represents slightly less than 9.9 percent of CB's outstanding shares.
TON has also agreed to vote its remaining 52,677 shares in favor of the
transaction after receipt of any required shareholder approval under the
Hawaii Control Share Acquisitions Statute. Until then, TON retains the right
to vote those shares at its discretion.
"Combining our institutions is the right fit at the right time for
Hawaii's future," said CPB's Clint Arnoldus, Chairman of the Board, President
and Chief Executive Officer. "It will be good for our shareholders, good for
our customers and most importantly good for Hawaii."
"Hawaii has a wonderful and unique culture which we must all work to
preserve," Mr. Arnoldus continued. "Hawaii needs strong and well financed
local companies that will work to revive its economy and, at the same time,
respect its unique values. Our combination would create a Hawaii-based bank
with the strength and visibility to compete with mainland-managed and
foreign-owned competitors, while maintaining our focus on personalized
'fiercely loyal' service. Our vision is to create the best bank for Hawaii,
one whose lending, investing and contribution decisions would be made here, to
benefit Hawaii, by people who know and love Hawaii.
"We have tremendous respect for CB. Our two institutions share common
roots, common values and a common market. No two banks are more intently
focused on serving Hawaii's consumers and businesses in a uniquely independent
and local way. Together we can deliver more to our customers, including an
expanded branch network, a broader menu of business and retail services, a
particularly strong commercial real estate capability, trust and wealth
management and the capital strength to increase lending limits and support our
clients' financial needs. And there is immense value in having Hawaii's
banking needs served by a stronger, local bank that is focused on our unique
local market.
"The primary driver of our proposal is growth for the future, and growth
requires good people. We hope that employees of CB will be interested in
positions within our combined company. Although cost savings through branch
consolidations and the elimination of operational and administrative
redundancies are an essential element of our proposed transaction, we believe
that we can best manage the impact on staff and our customers through a
cooperative, collaborative effort with CB's management team."
CPB said one of its core principles is to be a preferred employer in the
community, and it is proud of its record of investment in and advancement of
its employees.
Consistent with its strong commitment to the community, CPB is willing to
commit an additional $1 million to support local community needs, while at the
same time maintaining the current level of charitable contributions of both
CPB and CB. CPB plans to further enhance its community support by forming an
advisory committee consisting of prominent community leaders, including
members of the current CB board who do not join the board of the merged
company, with a specific mandate to advise the bank on matters of local
economic growth and cultural integrity.
Compelling Benefits for Shareholders of Both Companies
Based on the April 14, 2003 closing price of CPB stock, CPB's proposal
would give CB shareholders the equivalent of $70 per share, representing a
62 percent premium over CB's unaffected closing price on February 25th, the
day before CPB began purchasing shares of CB in the open market, and a
54 percent premium over the April 14, 2003 closing price of CB stock. The
consideration would include $21 in cash and 1.8956 shares of CPB common stock
for each CB share. CPB's board has stated its intention to continue its
current $0.16 per share quarterly dividend, thus providing CB shareholders
with an effective dividend increase of approximately 290 percent, or 3.90
times CB's current payout (assuming full reinvestment of the cash proceeds).
CPB expects double-digit accretion to earnings per share in the first year
following the close of the proposed merger. CPB anticipates a one-time
restructuring charge related to this combination of approximately $32 million.
"Together we can deliver extraordinary value to CB shareholders through a
combination that will be accretive to earnings in less than one year, raise CB
shareholders' cash dividends by approximately 290 percent, increase trading
liquidity and institutional investor interest, and give shareholders the
opportunity to own a piece of a company that has been a dependable performer,
year in and year out, for the past five years," concluded Mr. Arnoldus.
The proposed merger would create an organization with a pro forma market
capitalization in excess of $600 million, assets of $3.7 billion, total
deposits of $2.8 billion, and a tier 1 capital base of $275 million, all as of
December 31, 2002. The combined company would be known as CPB Inc., and would
remain headquartered in Honolulu, Hawaii.
The closing of the merger is subject to customary regulatory and
shareholder approval, due diligence, and the redemption of CB's poison pill.
Bear, Stearns & Co. Inc. is acting as financial adviser to CPB. Manatt,
Phelps & Phillips LLP is acting as CPB's legal counsel, and Devens, Nakano,
Saito, Lee, Wong & Ching is acting as CPB's Hawaii counsel.
Sullivan & Cromwell LLP is acting as counsel to the financial adviser.
CPB Inc. is a Hawaii bank holding company with $2.0 billion in assets.
Central Pacific Bank, its subsidiary, is Hawaii's third largest commercial
bank offering a full range of banking, trust and investment services with 24
branches statewide, including 5 supermarket branches, and 77 ATMs statewide.
CB Bancshares, Inc. with $1.7 billion in total assets, is the fourth
largest commercial bank in Hawaii and operates 21 branches in the state of
Hawaii.
Note: CPB will discuss today's announcement with analysts and investors on
the company's pre-scheduled earnings conference call tomorrow, April 17, at
10:00 a.m. Eastern Daylight Time. To participate in the question and answer
session, analysts and investors may dial into the call at 1-800-838-4403, and
international callers may dial 1-973-317-5319. A listen-only live broadcast
of the call also will be available on the investor relations page of the
company's website at www.CPBI.com , as well as a copy of this press release
and an investor slide presentation, which management will review on the call.
A replay of the call will be archived on the website and available for two
weeks.
FORWARD LOOKING INFORMATION
This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, (i) statements about the benefits of a merger
between CPB Inc. ("CPB") and CB Bancshares, Inc. ("CBBI"), including future
financial and operating results, costs savings and accretion to reported and
cash earnings that may be realized from such merger; (ii) statements with
respect to CPB's plans, objectives, expectations and intentions and other
statements that are not historical facts; and (iii) other statements
identified by words such as "believes," "expects," "anticipates," "estimates,"
"intends," "plans," "targets," "projects" and other similar expressions.
These statements are based upon the current beliefs and expectations of CPB's
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements: (1) the business of CPB and CBBI may not be
integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (2) expected revenue synergies and
cost savings from the merger may not be fully realized or realized within the
expected time frame; (3) revenues following the merger may be lower than
expected; (4) deposit attrition, operating costs, customer loss and business
disruption, including, without limitation, difficulties in maintaining
relationships with employees, customers, clients or suppliers, may be greater
than expected following the merger; (5) the regulatory approvals required for
the merger may not be obtained on the proposed terms; (6) the failure of CPB's
and CBBI's shareholders to approve the merger; (7) competitive pressures among
depository and other financial institutions may increase significantly and may
have an effect on pricing, spending, third-party relationships and revenues;
(8) the strength of the United States economy in general and the strength of
the Hawaiian economy may be different than expected, resulting in, among other
things, a deterioration in credit quality or a reduced demand for credit,
including the resultant effect on the combined company's loan portfolio and
allowance for loan losses; (9) changes in the U.S. legal and regulatory
framework; and (10) adverse conditions in the stock market, the public debt
market and other capital markets (including changes in interest rate
conditions) and the impact of such conditions on the combined company's
activities.
Additional factors that could cause CPB results to differ materially from
those described in the forward-looking statements can be found in CPB's
reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K) filed with the Securities and Exchange
Commission and available at the SEC's Internet site ( http://www.sec.gov ).
All subsequent written and oral forward-looking statements concerning the
proposed transaction or other matters attributable to CPB or any person acting
on its behalf are expressly qualified in their entirety by the cautionary
statements above. CPB does not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date the forward-looking statement is made.
With respect to financial projections for CBBI contained in this document,
neither CBBI nor any analyst has published any information for 2003, 2004 or
2005. In addition, CPB has not been given the opportunity to do any due
diligence on CBBI other than reviewing its publicly available information.
Therefore, management of CPB has created its own financial model for CBBI
based on CBBI's historical performance and CPB's assumptions regarding the
reasonable future performance of CBBI on a stand-alone basis. These
assumptions may or may not prove to be correct. The assumptions are
inherently subject to significant uncertainties and contingencies, many of
which are beyond the control of CBBI. There is no assurance that these
projections will be realized and actual results are likely to differ
significantly from such projections.
Subject to future developments, CPB intends to file with the SEC a
registration statement to register the CPB shares to be issued in the proposed
transaction, including related tender/exchange offer materials, and one or
more proxy statements for solicitation of proxies from CPB shareholders, and
may file one or more proxy statements for solicitation of proxies from CBBI
shareholders, in connection with special meetings of such shareholders at a
date or dates subsequent hereto. Investors and security holders are urged to
read the registration statement, related tender/exchange offer materials, and
proxy statements (when available) and any other relevant documents filed with
the SEC, as well as any amendments or supplements to those documents, because
they will contain important information. Investors and security holders may
obtain a free copy of the registration statement, related tender/exchange
offer materials, and proxy statements (when available) and other relevant
documents at the SEC's Internet web site at www.sec.gov . The registration
statement, related tender/exchange offer materials, and proxy statements (when
available) and such other documents may also be obtained free of charge from
CPB by directing such request to: CPB Inc., 220 South King Street, Honolulu,
Hawaii 96813, Attention David Morimoto, (808) 544-0627.
CPB, its directors and executive officers and certain other persons may be
deemed to be "participants" if CPB solicits proxies from CBBI and CPB
shareholders. A detailed list of the names, affiliations and interests of the
participants in any such solicitation will be contained in CPB's preliminary
proxy statement on Schedule 14A, when filed. Information about the directors
and executive officers of CPB and their ownership of and interests in CPB
stock is set forth in the proxy statement for CPB's 2003 Annual Meeting of
Shareholders.
SOURCE CPB Inc.
-0- 04/16/2003
/CONTACT: investors, Neal Kanda, VP & Chief Financial Officer of CPB
Inc., +1-808-544-0622, nkanda@cpbi.com; or Larry Dennedy of MacKenzie
Partners, +1-212-929-5239, ldennedy@mackenziepartners.com, for CPB Inc.; or
local media, Ann Takiguchi, PR/Communications Officer of CPB Inc.,
+1-808-544-0685, cell +1-808-223-4434, atakiguchi@cpbi.com; or Neal Yokota of
Stryker Weiner & Yokota, +1-808-523-8802, ext. 13, nyokota@strykerweiner.com,
for CPB Inc.; or financial media, Ian Campbell, idc@abmac.com, or Daniel
Hilley, dch@abmac.com, both of Abernathy MacGregor Group, +1-213-630-6550, for
CPB Inc./
/Web site: http://www.CPBI.com /
(CPF CBBI)
CO: CPB Inc.; CB Bancshares, Inc.; Central Pacific Bank
ST: Hawaii
IN: FIN
SU: TNM MAV CCA
AT
-- LAW070 --
5149 04/16/200317:00 EDThttp://www.prnewswire.com