Egan-Jones Proxy Services and Glass Lewis separately recommend their clients vote against Providian Financial Corp.'s proposed merger with Washington Mutual Inc.
Egan-Jones contends the price is inadequate and criticized the company for failing to approach other potential acquirers that might have agreed to pay more, according to its report on the issue. Officials there are also troubled that some of Providian's executive officers and directors have interests in the merger and might benefit more than shareholders.
Glass Lewis noted in a report that the deal — valued at $6.5 billion, or approximately $18.71 a share — is a 4.4% premium over the Providian stock price the day before the announcement of the merger agreement. "Its small premium certainly does not warrant investor excitement, and we strongly believe that (Providian) standing alone or pursuing some other deal will likely yield a better financial outcome for investors. By our math, this company is worth between $21 and $24 (a share) in the merger market today."
The Providian shareholder vote is scheduled for Aug. 31.