The Shareholder Forum

Special Program


Independent Analysis of Shareholder Interests

in a merger transaction proposed by

Providian Financial Corporation

Forum Home Page


Providian Program Home Page

Program Summary

(August 10, 2005)

     In response to publicly expressed investor concerns about the pricing of a merger transaction proposed by the management of Providian Financial Corporation (“PVN”), a special “Forum” program has been initiated for the limited purpose of arranging an independent analysis of shareholder interests.

     The program is intended to develop a broadly applicable process for providing public shareholders with objective, professional analyses of transaction proposals, as an alternative to the current practice of relying on “fairness opinions” presented by a transaction’s proponents.

     Anyone with an interest in Providian or in the general objective of assuring informed investment decisions  is encouraged to participate in the program, which will be managed by Gary Lutin according to the usual Forum policies.

August 10, 2005




Letter Requesting Providian Management Cooperation

with Independent Analysis

(August 10, 2005)

Copied below is the text of a letter sent to the chairman of Providian's board of directors requesting management's cooperation with an independent, shareholder controlled analysis of investor interests in a proposed merger transaction with Washington Mutual, Inc.

It was reported in an August 14, 2005 New York Times article that a Providian spokesman had said that "the company would probably not" cooperate as requested.  There had been no other response to the letter as of August 17, 2005.

On August 17, 2005 the Egan-Jones Proxy Services division of Egan-Jones Ratings Co., an independent research firm which is recognized for its financial analyses of companies for institutional investor clients, published a report addressing the interests of Providian shareholders in the proposed transaction and granted permission for its use in the special Forum program.




575 Madison Avenue

New York, New York 10022

Telephone (212) 605-0335

Facsimile (212) 605-0325


August 10, 2005



By telecopier: 415-278-6028


Mr. Joseph W. Saunders

Providian Financial Corporation

201 Mission Street

San Francisco, California 94105



Dear Mr. Saunders:


            As indicated in my telephone message, your cooperation is requested to facilitate an independent, shareholder controlled analysis of investor interests in your proposed transaction with Washington Mutual.


            It is assumed that you will appreciate the perceived need of many Providian shareholders for a clearly objective professional analysis of the alternatives being presented for their consideration, particularly in the context of a large unaffiliated shareholder’s publicly stated disagreement with the opinions of the investment bankers engaged by the transaction’s proponents.  In this case, investors may find it especially difficult to rely on the opinions of investment bankers who have interests in contingent transaction fees as well as in continuing relationships with both the seller’s and buyer’s corporate management.


            Efforts will be made to select a securities analyst and define the engagement arrangements within a week, so that a report can be made public in time for consideration by shareholders in their voting decisions.  Knowing whether we may expect the cooperation of Providian management will help us plan a more efficient process and minimize costs.  Specifically, it is hoped that you would respond voluntarily to the independent analyst’s information requests, since the formal procedures for demanding records would not allow completion of a rigorous review before your currently scheduled August 31 meeting date.  And regarding a matter that concerns many institutional investors, your willingness to assume corporate responsibility for the reasonable expenses of an independent analysis – by means of a contribution to a not-for-profit institute that can manage the arrangements – would fairly allocate its costs among all Providian shareholders who benefit from it, eliminating the need for some investors to bear a disproportionate burden for their leadership.


            For a preliminary indication of the standards that will be followed to assure the integrity of the process, you may wish to review the conditions that have been defined for participation in various shareholder “Forum” programs posted on the following web site:


            Please let me know what additional information will be useful to you in your consideration of this request.  I will of course welcome any suggestions you may have to make the contemplated independent offer analysis as useful as possible to Providian’s shareholders, and look forward to discussing your views.



Sincerely yours,





Gary Lutin






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This public program addressing shareholder interests in Providian Financial Corporation (PVN) was initiated with the leadership support of Putnam Investment Management, and according to the Forum’s stated "Conditions of Participation" is open to all shareholders of the subject company and to any fiduciaries or professionals concerned with their decisions. 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.