Dime antitrust gets nod

March 20, 2000: 6:35 p.m. ET

Delaware Judge rejects North Fork Bancorp's bid to stop Dime lawsuit

NEW YORK (CNNfn) - Dime Bancorp's move to fend off North Fork Bancorp's hostile $1.8 billion takeover offer moved a step forward Monday after a Delaware Court Judge gave the nod for Dime's antitrust case to be heard in New York State rather than in a Delaware Court.
    Vice Chancellor Stephen Lamb of the Delaware Court of Chancery told lawyers for both sides that, "to my mind, it would be a complete abuse of power and discretion to enjoin (stop) Dime from prosecuting this state law antitrust claim in the Courts of New York as it is currently framed."
    The decision moves Dime a step closer to successfully fending off North Fork's offer, which it says violates antitrust laws by giving it too many branches in too small a space. On March 10, Dime sued North Fork, arguing that its offer violated antitrust laws and would reduce competition in New York and Connecticut.
    North Fork Bancorp formally began its takeover attempt of Dime Bancorp last week, filing documents with the Securities and Exchange Commission and mailing the offer to shareholders. The bank teamed up with FleetBoston Financial Corp., which agreed to contribute $250 million in a combined North Fork-Dime entity, and to buy 17 of the Dime bank branches from North Fork.
    New York-based Dime had rejected the offer in favor of a planned $1.3 billion deal with Hudson United Bancorp, indicating it was "deeply disappointed" with Melville, N.Y.-based North Fork's move. The North Fork deal valued Dime at $16.65 a share based on last Wednesday's closing stock price, while the Hudson deal was worth $11.64 a share to shareholders.
    But separately, Lamb said that Dime shareholders had already voted enough proxies to defeat the proposed merger with Hudson United -- a merger Dime has publicly supported throughout North Fork's attempted takeover.
    "You're having your vote, which you say you've already won," Lamb said to David Margules, an attorney for North Fork, during a court hearing.
    Lamb was referring to a North Fork affidavit containing the proxy vote indication in advance of a special Dime Bancorp shareholder meeting on Friday. The judge didn't say what evidence North Fork had for its statement.
    Typically the results of shareholders' votes are not released until all the proxies are collected and counted, even if most of the proxies indicate a strong leaning either way. In this case, the Judge revealed the results, which he learned from a document submitted by North Fork.
    A spokesperson for Dime said the bank could not comment on the situation.
    Margules said North Fork would ask the New York Supreme Court to dismiss Dime's antitrust case.
    Lamb will conduct a hearing the week of April 10 on North Fork's case, filed March 8 in Delaware, which alleges that provisions in the Dime-Hudson merger plan illegally restrict the Dime board from considering a superior offer.
    Shares of Dime (DME: Research, Estimates) fell 3/16 Monday to 15-3/4. North Fork (NFB: Research, Estimates) shares slipped 7/16 to 16-7/16 while Hudson United (HU: Research, Estimates) stock fell 1-5/16 to 20-1/2.