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 Shareholders Approve Sale
Wednesday August 31, 5:26 pm ET
By Michael Liedtke, AP Business Writer

Providian Shareholders Approve Sale to Washington Mutual

SAN FRANCISCO (AP) -- Providian Financial Corp.'s shareholders on Wednesday accepted Washington Mutual Inc.'s $6.5 billion takeover bid, brushing aside concerns that one of the nation's last independent credit-card lenders could have been sold for a higher price.

A total of 197.5 million Providian shares, or 67 percent of the common stock outstanding, supported the deal, clearing the way for Washington Mutual to complete the acquisition Oct. 1.

San Francisco-based Providian announced the vote during an uneventful 10-minute special meeting that ended several months of debate about whether Seattle-based Washington Mutual -- the nation's largest savings and loan -- is paying enough to buy a credit-card company that will help it diversify beyond home mortgages.

Investors began to express their misgivings about the sale price almost as soon as Washington Mutual first unveiled its cash-and-stock bid of $18.71 per share. That was just 4 percent above Providian Financial's stock price before the deal was announced in early June, an unusually low premium.

After slipping after it first struck the deal, Washington Mutual's shares have bounced back. The company's shares rose 44 cents Wednesday to close at $41.58 Wednesday on the New York Stock Exchange, where Providian's shares rose 24 cents to close at $18.60.

After nearly failing in late 2001 amid an avalanche of loan problems, Providian bounced back under a new management team that boosted the company's profits by cleaning up the credit-card portfolio and cutting costs in a streamlining that shed about 10,000 workers.

Providian now employs 3,200 workers, most of whom are expected to be retained. The credit-card lender has 9.5 million accountholders with $18.6 billion in outstanding loans through June.

The complaints about Providian's price amplified earlier this summer after Bank of America Corp. agreed to buy MBNA Corp. for $35 billion -- a 31 percent premium. Some analysts argue that deal isn't an apples-to-apples comparison to Washington Mutual's bid for Providian because MBNA's loan portfolio is less risky.

Nevertheless, Putnam Investments LLC, one of Providian's largest shareholders with a 7.5 percent stake, took the unusual step of publicly opposing the Washington Mutual bid, hoping to force Providian's board to go back to the negotiating table or solicit other offers.

Two investment advisory firms also advised Providian's shareholders to reject the Washington Mutual bid because of the financial terms.

Glass Lewis & Co., the most strident critic, argued Providian might fetch as much as $24 per share, nearly $2 billion above Washington Mutual's offer, if the board were more effective negotiators.

But two other advisory firms favored the deal, and Providian's board never wavered from its position that it had extracted a fair price from Washington Mutual.

"I can honestly say there is nothing we left on the table," Providian Chairman Joseph Saunders said during an interview after Wednesday's meeting. Saunders said Providian held discussions with a significant number of prospective bidders in the United States and abroad before accepting Washington Mutual's offer.

Greg Taxin, the chief executive for Glass Lewis, remains convinced that Providian's shareholders are getting shortchanged. He argued the deal won approval because many of Providian's largest shareholders -- mostly mutual funds and pension funds -- own even larger stakes in Washington Mutual, giving them a financial incentive to accept the lowball offer.

"Those shareholders wanted it to go through because they realized Washington Mutual is getting a great bargain and they will benefit from the unfair price," Taxin said Wednesday.

The list of major shareholders with stakes in both Providian and Washington Mutual includes the Vanguard Group, Legg Mason Capital Management, Northern Trust Global Investments, Franklin Portfolio Associates, Barclays Global Investors, New York State Common Retirement Fund and the California Public Employees Retirement System.

Saunders, who lifted Providian's shares from a low of $2 reached shortly before his November 2001 hiring as CEO, will be one of the big winners in the Washington Mutual takeover. He is line for a $9 million cash payment when the deal closes and will continue to run Providian under a new three-year contract that could pay him another $9.6 million in salary and bonuses, according to documents filed with the Securities and Exchange Commission.

After the deal is completed, Providian's board and top executives, including Saunders, also will vest in a total of 3.5 million stock options and shares of restricted stock, according to Glass Lewis' analysis, setting the stage for another big windfall.

"We took a significant risk to go to work for Providian and we did our job," Saunders said of the management team that turned around Providian.




Inquiries, requests to be included in email distribution lists, and suggestions of new Forum subjects may be addressed to

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.