PHILADELPHIA -- Sovereign Bancorp Inc. yesterday unveiled a proposal to boost the voting rights of its largest shareholder, a Spanish banking company whose purchase of a stake in the thrift was at the heart of a contentious fight with shareholders.
In a proxy statement filed with the Securities and Exchange Commission, the Philadephia-based parent of Sovereign Bank said it wants shareholders to approve raising the voting rights of Banco Santander Central Hispano SA of Madrid to 24.99 percent.
In June, Sovereign and Santander closed a deal in which the Spanish bank bought a one-fifth stake in the thrift for $2.4 billion in cash. At the same time, Sovereign bought Independence Community Bank Corp. of New York for $3.6 billion in cash.
But several major shareholders opposed the deals, in part because they feared the transactions would have diluted their voting rights. The deals were not subject to shareholder approval, another point of contention.
Since the deals closed, Santander has been buying shares of Sovereign in the open market, held in a voting trust. Santander's voting rights currently are limited to 19.99 percent.
As of Aug. 8, Santander owned about 114 million shares of Sovereign, comprising 24.1 percent of outstanding shares. In the June transaction, it purchased over 94 million shares, which includes a 5 percent stock dividend issued a month later.
Shares of Sovereign fell 62 cents, or 3 percent, to close at $20.07 on the New York Stock Exchange.