March 21, 2007
In the wake of the announcement of what would be the biggest credit union merger to date between GTE Federal Credit Union and Suncoast Schools Federal Credit Union, Credit Union Times is taking a look back two years ago at the first attempt at a hostile credit union take over.
The $1.6 billion Wings Financial Federal Credit Union submitted a merger proposal to the board of directors at $177 million Continental Federal Credit Union despite repeated rebuffs by Continental to prior merger proposals from Wings.
Tom Glatt, president/CEO of Continental at the time, said the proposal was the third time Wings Financial had broached the idea of merger with Continental. The first was in the summer of 2006 and the second was in September 2006.
Along with the proposal to Continental's board, Wings Financial launched a campaign to get Continental members to move the proposal forward. Wings Financial created a Web site that had an online petition that encouraged Continental members to direct the board to enter into good faith discussions with Wings Financials board. The petition also called for members to push for a meeting and mail ballot vote of Continental's membership to confirm member interest in the possible merger.
If the merger went through, Wings Financial also promised members $200 each.
Glatt responded to the proposal, saying, "The strongest thing I can say is this would be considered a hostile takeover. Does this sound like the way credit unions do business? We are not interested at this time."
Wings Financial CEO Paul Parish said that he didn't believe the merger proposal was hostile, but that it was about bringing added value.