Putnam to Oppose Providian, Washington Mutual Deal
Putnam Investments as announced that intends to vote against the proposed sale of Providian to Washington Mutual saying that WaMu's offer price is too low. In a press release, Putnam said:
Putnam regards the price as inadequate and believes recent fundamental trends and Providian management's outlook confirm Putnam's judgment on the value of the Providian franchise.In a consolidating industry and in light of the recently announced Bank of America/MBNA transaction, mono-line credit card companies such as Providian represent an increasingly scarce asset that should command a higher price. By accepting a price well below the fair value of the Providian common stock, Putnam believes the merger would transfer significant value to Washington Mutual's existing shareholders, at the direct expense of Providian's shareholders.
Putnam Investments and the Putnam Funds currently have the power to vote approximately 7.5% of Providian's outstanding shares of common stock (based upon the number of shares outstanding as of June 30, 2005).
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