FILED BY GLB BANCORP, INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14A-12 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: GLB BANCORP, INC.
COMMISSION FILE NO. 000-24255
DATE: OCTOBER 15, 2003
This filing relates to the proposed merger of GLB Bancorp, Inc. with and into
Sky Financial Group, Inc. pursuant to the terms of an Agreement and Plan of
Merger, dated as of July 15, 2003, by and between GLB Bancorp and Sky Financial.
The merger agreement is on file with the SEC as an exhibit to the Current Report
on Form 8-K filed by GLB Bancorp on July 23, 2003, and is incorporated by
reference into this filing. In addition, on September 12, 2003, Sky Financial
filed a joint proxy statement/prospectus, Registration Statement No. 333-108171,
relating to the proposed merger pursuant to Rule 424(b)(3) of the Securities
Act. The following press release was issued by GLB Bancorp on October 14, 2003:
GLB BANCORP, INC. REJECTS UNSOLICITED MERGER PROPOSAL
FROM JEROME T. OSBORNE, SR.
MENTOR, OHIO - October 14, 2003 - GLB BANCORP, INC. (NasdaqSC: GLBK) announces
that its Board of Directors has today informed Jerome T. Osborne, Sr. that his
unsolicited merger proposal of October 10, 2003 does not, in its view, represent
a superior proposal to the previously announced stock-for-stock merger with Sky
Financial Group, Inc. (NasdaqNMS: SKYF). A special meeting of the GLB Bancorp
shareholders will be held as scheduled on Wednesday, October 15, 2003, for the
purpose of approving the previously announced merger agreement between GLB
Bancorp and Sky Financial.
The following is the complete text of the letter GLB Bancorp Board delivered to
Jerome Osborne today in response to his cash-for-stock merger proposal dated
October 10, 2003:
"October 14, 2003
Dear Jerry:
The Board of Directors of GLB Bancorp, Inc. has reviewed your letter dated
October 10, 2003, in which you proposed a cash-for-stock merger with GLB
Bancorp. As you know, your proposal was thoroughly discussed at the special
meeting of the Board that was held yesterday afternoon.
As an initial matter, the Board very much appreciates your interest in
acquiring GLB Bancorp, and believes it and the Special Committee of the Board
have made every effort to accommodate the various proposals you have made over
the last month. The Board and the Special Committee have met face-to-face with
you and your legal and financial advisors on several occasions. In a further
attempt to address your concerns, the Special Committee even took the step of
arranging a meeting among you, your advisors and representatives of Sky
Financial Group, Inc.. Throughout the process, the Board and the Special
Committee informed you and your advisors regarding the steps you would need to
take to permit the Board to withdraw its approval and recommendation of the
pending merger with Sky Financial in favor of a competing proposal from you.
Also, as we think you already appreciate, the Board respectfully disagrees
with the assessment in your September 23rd letter, your September 12th letter
and your resignation letter from a week earlier that the Board has "decided not
to maximize shareholder value" or that it failed to receive "adequate
information regarding, or adequately [consider], the community impact or value
of alternative proposals." Throughout the lengthy and deliberative process
leading up to the decision to merge with Sky Financial, all the members of the
Board remained fully informed regarding various alternative proposals and the
conditions presented in those proposals. The Board, acting on the recommendation
of its Special Committee, selected the proposal that it deemed to be in the best
interests of the GLB Bancorp shareholders, employees and community. The standard
employed by the Board in making its decision is carefully delineated in the
proxy statement/prospectus that GLB Bancorp distributed to you and the other
shareholders last month.
After considering your most recent letter, the Board regrets that it cannot
accept your merger proposal for the following reasons:
A. Financing. In your September 23rd letter and at a meeting with the
Board, you indicated that you had the resources for the $21.0 million
offer contained in your September 23rd letter, including amounts on
deposit at GLB Bancorp and a $10.0 million bank line of credit. Your
merger proposal does not indicate how you will get the additional
funds necessary to pay the rest of the $43.4 million in cash merger
consideration proposed in your October 10th letter. As the Board has
previously indicated to you and your advisors, and as you are aware
because you have previously presented evidence to the Board that you
have sufficient wherewithal to consummate your prior smaller
proposals, the Board simply cannot, in the reasonable exercise of its
fiduciary duties, accept a proposal that contains no evidence that the
necessary funds are available. Moreover, you and your advisors have
not presented the Board with any evidence as to whether you will be
using your own funds or will be borrowing funds in addition to the
previously disclosed $10 million line of credit to finance your
proposal.
B. Form and Taxation of Merger Consideration. As you know from the time
you spent on the Board as a director, the Board very early on
expressed a clear preference for an acquisition proposal structured as
a stock-for-stock transaction, because the shareholders' receipt of
stock in exchange for GLB Bancorp common shares in the transaction
would not be taxable to the shareholders until such time as they chose
to sell those shares. However, you have structured your merger
proposal as a cash-for-stock transaction that would result in the
shareholders being subject to immediate taxation upon receipt of that
cash (thereby depriving them of any choice as to when to incur the
tax).
C. Firmness of Offer. Despite the fact that the Sky Financial merger has
been pending since July 2003, the Board still does not have an offer
from you that it could consider to be sufficiently firm to warrant
postponing the shareholder meeting, much less
withdraw its recommendation of the Sky Financial merger. Your one-page
proposal letter of October 10th presents many open issues beyond the
failure to address how you would finance the merger. At your last
meeting with the Special Committee, the committee members advised you
and your advisors that it was the view of the Board that you would
need to post a nonrefundable deposit, in an amount to be agreed
between $3.00 and $4.00 per GLB Bancorp common share, to help protect
the shareholders of GLB Bancorp against the substantial risks
associated with any failure to consummate your proposed merger. Your
October 10th letter is silent as to this point, which only leads the
Board to believe that you have rejected the Board's nonrefundable
deposit condition. That letter is also silent as to the numerous
regulatory issues that you would need to address (as outlined in more
detail below).
In addition, your October 10th proposal was the third in a series of
proposals that contained serious errors and presented issues that you
and your advisors had failed to anticipate. For example, your second
proposal failed to recognize that the proposed transaction structure
would be subject to two levels of tax. Under the circumstances, and in
the absence of any evidence that you and your advisors were prepared
and able to quickly negotiate and enter into a merger agreement, the
Board was forced to conclude that your proposal was not sufficiently
serious or firm to warrant delaying the approval of the Sky Financial
merger.
D. Timing and Risk of Non-Consummation. The Board is concerned that it
would be a long time (in the Board's view, at least six to eight
months) before you would be in a position to be able to consummate the
proposed merger, and that if anything were to happen that would
prevent you from doing so (e.g., a failure to obtain regulatory
approval), GLB Bancorp may by that time have ceased to be an
attractive acquisition prospect and the Board would have failed to
maximize shareholder value. To address this concern and as discussed
above, the Special Committee informed you and your advisors that the
Board would require that, as part of any proposal, you offer to make a
cash deposit to indemnify the shareholders of GLB in the event you are
unable to close the merger for any reason. When compared with the
imminent shareholders' meeting to vote on the merger with Sky
Financial and the likelihood of closing the merger with Sky Financial,
any advantages presented by your latest proposal are, in the Board's
view, far outweighed by the chance that your proposal may not be
consummated and the amount of time it would take before the Board
would know if the proposal could be consummated.
E. Regulatory Issues. The Board also continues to be concerned about your
ability to consummate the proposed merger in view of the regulatory
approvals you would need to obtain in order to form a new bank holding
company as an acquisition vehicle and to obtain approval of the
proposed change-in-control of Great Lakes Bank, including but not
limited to obtaining approval of your previously-expressed intent to
use GLB Bancorp capital to fund an acquisition of the company and pay
the termination fee to Sky Financial. Your October 10th proposal
contains no evidence that your new bank holding company would remain
able to support Great Lakes Bank's capital needs after the closing,
regardless of whether you used any capital of the new bank holding
company to fund the merger consideration or any acquisition costs.
In addition, as discussed with you and your advisors at a meeting with
the Special Committee, to obtain regulatory approval you would likely
need, at a minimum, a business plan (that indicates, among other
things, whether there would be any change in the existing business
plan of GLB Bancorp), a proposed management team, a proposed board of
directors, a proposed dividend policy and evidence that Great Lakes
Bank would be a "well-capitalized" bank under current definitions. You
and your advisors have produced no evidence that you have any of that
information, leaving the Board with no ability to make a determination
as to whether your most recent proposal would be likely to receive
regulatory approval.
Moreover, because your proposal fails to disclose how the merger would
be financed, it is impossible for the Board to know the initial
debt-to-equity ratio of your new bank holding company after the
consummation of the merger, an issue the Board believes will also be a
major concern of the bank and bank holding company regulators.
Therefore, as noted above, you and your advisors have not given the
Board any information that would enable it to reach a conclusion
regarding the likelihood of regulatory approval.
F. Effect on Employees, Customers and Community. Because your offer
implies (based on statements in your prior letters and in
conversations with the Board) that you will be using the capital of
the new bank holding company to fund the acquisition, it suggests that
the bank will be a smaller institution following the transaction. You
have also stated in meetings with the Board that you intend to close
some of Great Lakes Bank's branches after the transaction is
consummated. The Board fails to appreciate how you anticipate being
able to retain the bank's existing employees and better meet the needs
of its customers and community through what appears likely to be a
smaller, less capitalized bank with fewer branches. The Board is also
concerned about the effect of continued uncertainty about the
company's future on its employees and customers.
In view of all of these issues and concerns, the Board decided that it
could not, in good faith, conclude that your proposed merger offers superior
value to the GLB Bancorp shareholders or would provide any additional benefit to
its employees or community. The Board was also very disappointed that your
latest proposal did not go as far as the Special Committee informed you and your
advisors it would need to go to be acceptable to the Board, especially since it
has now been eight months since the Board first began exploring the possibility
of selling the company, almost three months since the merger agreement with Sky
Financial was signed, and over a month since your first meeting with the Board
about your first proposal.
Again, the directors of GLB Bancorp believe that they have literally bent
over backwards to treat you fairly by giving each of your proposals careful
consideration and by informing you and your advisors about the issues the Board
had with each proposal and what you would need to include in an acquisition
proposal before the Board could withdraw its support for the Sky Financial
merger and back a proposal by you. As a group, they would have liked to have
seen you, as one of the company's founders and a former director, succeed in
your efforts to acquire the company. However, the directors also believe that
they need to act in good faith and do what is necessary to meet their fiduciary
duties to the shareholders of GLB Bancorp by balancing the various acquisition
proposals that have been made over the last few months and selecting the one
they believe is in the best interests of the shareholders.
Sincerely,
THE BOARD OF DIRECTORS OF GLB BANCORP, INC."
[End of Letter]
About the Pending Merger with Sky Financial Group, Inc.
In July 2003, GLB Bancorp and Sky Financial announced that they entered into an
agreement providing for a stock-for-stock merger in which each outstanding GLB
Bancorp common share would be exchanged for 0.74 of a Sky Financial common
share. The merger is subject to customary closing conditions, including
regulatory approvals and the approval of the shareholders of GLB Bancorp. Under
the merger agreement, GLB Bancorp may be required to pay Sky Financial a
termination fee of $1,250,000 if GLB Bancorp enters into an agreement with a
third party to consummate a competing acquisition proposal.
Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in
this press release may be deemed to be forward-looking statements. Such
statements involve risks and uncertainties including, but not limited to:
failure to consummate GLB Bancorp's proposed merger with Sky Financial because
of, among other things, a failure to obtain required shareholder or governmental
approvals, or adverse regulatory conditions that may be imposed in connection
with governmental approvals of the merger, or Jerome Osborne's offer to acquire
GLB Bancorp; and the general volatility of the capital markets and the market
price of GLB Bancorp's common shares and Sky Financial's common shares. Actual
results could differ materially from those contemplated by these forward-looking
statements. GLB Bancorp disclaims any intent or obligation to update these
forward-looking statements.
About GLB Bancorp
Headquartered in Mentor, Ohio, GLB Bancorp is a one-bank holding company that
holds all of the outstanding common stock of Great Lakes Bank. Great Lakes Bank
has $209 million in total assets with twelve branches throughout Lake County,
Ohio and one branch in Cuyahoga County, Ohio.