The Shareholder Forum

supporting investor interests in the use of their capital to produce goods and services


Purpose & History of Services

The Shareholder Forum

The Shareholder Forum supports investor interests in corporate enterprise value with services that require independence – and that may benefit from the Forum’s network resources and recognition for advocacy of long term investor interests – to assure a definition of relevant issues and fair access to information that can be relied upon by both corporate and investor decision-makers.

The policies that provide a foundation for the Forum’s marketplace functions have been carefully developed and tested to allow any investor to participate in its communications, either anonymously or visibly, without acting in concert. Established originally to accommodate professional fund managers, this independent moderator function has proved to be consistently effective in managing orderly processes of issue definition for rational analysis by fiduciaries who are responsible for informed decisions.

Initiated in 1999 by the CFA Society of New York (at the time known as the New York Society of Security Analysts) with lead investor and former corporate investment banker Gary Lutin as guest chairman to address the professional interests of its members, and independently supported by Mr. Lutin since 2001, Forum programs have achieved wide recognition for their effective definition of important issues and orderly exchange of the information and views needed to resolve them. The Forum's ability to convene all key decision-making constituencies and influence leaders has been applied to subjects ranging from corporate control contests to the establishment of consensus marketplace standards for fair disclosure, and has been relied upon by virtually every major U.S. fund manager and the many other investors who have participated in programs that addressed their interests.

Currently important applications of the Forum’s independent position include the support of corporate managers who wish to provide the leadership expected of them by responding to activist challenges with orderly reviews of issues relevant to long term investor interests.

Requests for Shareholder Forum consideration of support may be initiated confidentially by any investor or by the subject company, or by the professional advisors to either.  

Special Program


Independent Analysis of Shareholder Interests

in a merger transaction proposed by

Providian Financial Corporation



Program Index



Providian Holders to Vote on Acquisition
Monday August 29, 10:12 am ET
By Allison Linn, AP Business Writer

Providian Financial Shareholders to Vote on Acquisition by Washington Mutual

SEATTLE (AP) -- Is Washington Mutual Inc.'s plan to acquire Providian Financial Corp. a match made in financial heaven or a raw deal for Providian investors?

That's the question Providian's investors will face Wednesday when they are asked to approve the acquisition.

The stock and cash deal -- valued at $6.45 billion, or around $18.71 per share -- is being opposed by one of Providian's largest shareholders, Putnam Investments LLC, and the investment research firm Glass, Lewis & Co. But others, including influential advisory firm Institutional Shareholder Services, have recommended that shareholders approve the deal.

Seattle-based Washington Mutual and San Francisco-based Providian, a credit card issuer, have both repeatedly said that they think the deal is fair. Washington Mutual expects to use Providian to break into the $800 billion credit card industry.

Those who oppose the deal contend that Providian is worth more than the asking price, which represented just a 4 percent premium over its closing stock price around the time of the June 6 announcement. Shares of the company rose 9 cents to $18.27 in morning trading Monday on the New York Stock Exchange, where they have traded from $14.32 to $19.28 in the past year.

The once-troubled company has over the past few years turned itself around, which some say make it both an attractive takeover target and a strong stand-alone company. The acquisition also comes amid increasing consolidation in the industry, which some argue has made Providian a rare -- and therefore more valuable -- commodity.

Such factors led Putnam, which owns about 7.5 percent of the company, to believe that the company would be better off either staying on it own or finding a better offer.

"Our beef is with the price," said David King, a senior portfolio manager with Putnam.

Experts at Glass Lewis say the deal should be valued at between $21 and $24 per share. In opposing the plans, Glass Lewis also argued that it doesn't think Providian shopped itself around enough before striking a deal with WaMu, the nation's largest savings and loan. They also argue the deal appears to be too sweet for management, at the potential expense of shareholders.

Providian spokesman Alan Elias said company executives did talk to other financial institutions before agreeing to do a deal with WaMu. He declined to comment on how the deal affects top management.

"We continue to feel that the merger is fairly priced and will be beneficial to shareholders," Elias said.

He noted that other independent groups have supported the deal.

In its analysis, Institutional Shareholder Services said it believes the market had already incorporated the value of an expected acquisition into the share price, which is why the offer wasn't higher.

"While we recognize that the offer value may not be the maximum price that could have been achieved, we do believe that the offer falls within an appropriate range," ISS said in recommending that shareholders support the deal.

Rick Shane, an analyst with Jeffries & Co. who follows Providian, said he thinks many outside the industry could view the deal as underpriced because they perceive the sector to be growing quickly. But Shane thinks ever-more intense competition will make it tough for such companies to continue to grow as quickly as they have been, which is one reason the Providian deal is valued where it is.

"Industry participants are looking at a reality that perhaps outsiders don't have a perspective to see at this point," he said. "A year from now, it may all make a lot more sense."

Shares of Washington Mutual rose 19 cents to $40.94 in trading on the NYSE. They have traded in a 52-week range of $37.51 to $43.90.




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Publicly open programs of the Shareholder Forum are conducted for free participation of all shareholders of a subject company and any fiduciaries or professionals concerned with their decisions, according to the Forum’s stated "Conditions of Participation." In all cases, each participant is expected to make independent use of information obtained through the Forum, and participation is considered private unless the party specifically authorizes identification.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.