Launched in 2005 Relational Investors, a registered investment adviser, winning a proxy contest on two seats on the Board of Directors of Sovereign Bancorp Relational accused Sovereign operational mismanagement and poor corporate governance, a breach in fiduciary responsibility by the company’s board of directors. Relational claims that a board was reconstituted in the best interest of investors. Sovereign then entered into a controversial three-way deal with Banco Sant … Read more »

Launched in 2005 Relational Investors, a registered investment adviser, winning a proxy contest on two seats on the Board of Directors of Sovereign Bancorp Relational accused Sovereign operational mismanagement and poor corporate governance, a breach in fiduciary responsibility by the company’s board of directors. Relational claims that a board was reconstituted in the best interest of investors. Sovereign then entered into a controversial three-way deal with Banco Santander Central Hispano of Spain, the Relational efforts by diluting its ownership and position by Santander foiled board seats and veto power in the removal of Sovereign’s CEO. Relational Investors of Explains the tactics used to try to make the deal Santander and the tactics of Sovereign Bancorp used to derail them defend.
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from
David F. Larcker,
Brian Tayan
Source: Stanford Graduate School of Business
22 pages.
Release Date: 12 April 2007. Prod #: CG06-PDF-ENG
Sovereign Bancorp and Relational Investors: The Role of Activist Hedge Fund HBR case solution

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