Corporate directors often are accused of being pushovers. But in the case of Union Bank, the directors pushed back at a lowball takeover offer from the Japanese corporate parent -- and won a hefty premium for shareholders.
UnionBanCal Corp., the San Francisco-based holding company for Union Bank of California, agreed Monday to a $73.50-a-share buyout from Mitsubishi UFJ Financial Group. That was 27% more than the $58-a-share offer Mitsubishi made in April, and nearly 17% above the revised bid of $63 a share that the Japanese firm made last Tuesday.
Wall Street clearly was surprised by the final price: UnionBanCal's shares had closed Friday at $65.49. The stock was up $7.69, or 12%, to $73.18 on Monday on news of the deal. Looks like some arbitrageurs missed a great opportunity.
Mitsubishi was in the driver's seat on this transaction because it already owned 65% of UnionBanCal. The Japanese company, which owns Bank of Tokyo, has been the controlling shareholder of UnionBanCal, which has $60 billion in assets, since 1996.