Santander and Sovereign Revise Agreement

Banco Santander Central Hispano, Madrid, and Sovereign Bancorp Inc., Philadelphia, have revised the terms of the agreement in which the Spanish banking firm will acquire a stake in Sovereign.This transaction impacts a second deal for Sovereign, the proposed acquisition of mortgage warehouse credit provider and commercial mortgage lender Independence Community Bank Corp., Brooklyn, N.Y. Among the features of the revised terms, Santander no longer will hold veto power over the firing of Sovereign's chief executive, nor can they approve the hiring of a new chief executive. Staff from New York Stock Exchange has advised that the deal will not require approval from Sovereign's shareholders, an issue being pursued by two large holders that oppose the deal. A statement from Ralph V. Whitworth, principal of Relational Investors, said, "It is unfortunate that the NYSE has seen fit to provide a road map for disenfranchising shareholders. Regardless of how Sovereign attempts to disguise it, this is a transformational transaction on which shareholders should have a right to vote." Relational is considering an appeal to the Securities and Exchange Commission.