“Like many business men of genius, Don Corleone learned that free competition was wasteful, monopoly efficient.”
In case you came in late, the Godfather series [for whole series click "Godfather" button above] has looked at the issue of mergers among credit unions. BECU/SAFE are featured; but are by no means the exception, nor meant to be singled out.
In this merger, the SAFE Board of Directors is giving away the credit union and $400 million in cash to BECU. Several better "deals" have been suggested [link]; it is hard to imagine "a deal" which is worse.
If the SAFE Board of Directors reconsidered "the deal", paid out the $400 million to SAFE members, and avoided the potential class action lawsuit; would BECU still take the merger? Guess we should ask Jefferies, LLC [link] - BECU's merger advisor. But, even after rightfully returning the $400 million in cash to SAFE shareholders...
✅ We can state without argument that BECU would still receive a thriving $4 billion asset business, 244,000 additional members, 21 branches in 13 cities, a knowledgeable, experienced, local staff, with a strong reputation for service. Not to mention all those highly-heated vapors promised in the press release [link]!
✔ If you wanted "to create" a similar $4 billion credit union in California: 1) What would it cost you? and 2) How long would it take?
😎 Where could you go "to acquire" such a powerful business entity for free?
** For the entire Godfather series click the "Godfather" button at top.
Credit unions aren't given away, and credit unions that vote to approve mergers don't a cause of action.
ReplyDelete1:40 pm If the members voting are not fully and fairly informed about the giveaway and the loss of $400 million in cash, suspect that there may be a problem.
DeleteCan't find anyone correctly informed who would give all that up, when they can enjoy exactly the same benefits by opening a BECU share account with a deposit of $25. Can you?
Perhaps SAFE has a sopisticated advisor like Jefferies who can disclose to SAFE members why the merger is a great financial deal?
Can you explain how it is a loss of 400 million? There is no reason to presume members will be not fully or fairly informed. Do you forget they will vote for this outcome?
Delete2:04 pm Troll IQ Test!
DeleteIf disclosures were full and fair... easy way to do that is to give members the following choices on the merger ballot:
Choose only one:
1) Get free membership in acquiring credit union [in this example BECU].
2) Get free membership in acquiring credit union and $1,639 cash, [ in this example BECU]
ReplyDeleteSo you seem to be advocate for responsible Boards and members' capital.
1:55pm Yes! You confirm the two potential weaknesses in this type of credit union merger proposal.
Delete1) the Board of a credit union is responsible - and liable.
2) The capital does belong to the members - $400 million in this case.
I finally get it! I didn’t know the members of a 4 billion cu can vote to dictate the terms to a 30 billion CU that is acquiring them.
DeleteYou act like this is a bank acquisition where a bank is acquired by another with no consideration.
DeleteWell, sometimes it's cash, and sometimes its cash and shares. This is analagous to a bank merger when only shares are exchanged
4:34 pm Major Troll Trash Alert!!!!
DeleteIt is an acquisition. It is described even in regulatory language as a business transaction" between "acquiring" (BECU) and "acquired (SAFE) credit unions.
Completely trollish! With open membership anyone in the U.S. can go online right now and join BECU ["At BECU, membership is free."] and obtain free ownership rights, including all SAFE members.
Why should SAFE members have to pay $400 million for membership rights they can get for free?
People Helping People? Don't think so...
4:32pm The members of SAFE do get to vote on whether to giveaway the CU and $400 millon in cash.
ReplyDeleteWould suspect that the Board of BECU would be advised by Jefferies to accept the $4billion CU and let the members keep their capital.
Since that idea doesn't seem to make sense to you stay tuned for Part VII and you will be enlightened.
Then in Part VIII will give you an idea of how easy it would be to find @ 4,000 other CUs who will gladly accept the offer if BECU won't! The real "deal"!