Oct. 24, 2005: About a year after announcing the $3.6 billion acquisition of Brooklyn-based Independence Community Bank and a sale of a 19.9% stake to Spain's Banco Santander for $2.4 billion, a lot has changed at Redding, Pa.-based Sovereign Bancorp Inc. Amidst Sovereign's efforts to integrate Independence branches into its own network, long-time CEO Jay Sidhu, who oversaw Sovereign's transformation from a Pennsylvania savings bank into a regional commercial bank that spans the Northeast Corridor from Philadelphia to Boston, was ousted by shareholders. The recent ouster basically culminated from Sidhu's agreement to sell a stake to Banco Santander, an agreement that gave the Spanish bank first-right of refusal should Sovereign choose to sell itself. A vocal group of shareholders led by hedge fund Relational Investors LLC was opposed to the Banco Santander agreement and railed against it. The outrage by dissident shareholders led Pennsylvania state government to chime in passing a law that basically helped the bank close the deal despite dissent. However, Sidhu was still forced to accept Relational's Ralph Whitworth to the board. It is widely believed that Whitworth helped poison the board against Sidhu, who had weathered equally ill-received acquisitions (namely the 1999 purchase of 278 branches from Fleet Boston Financial) without any trouble. —Matthew Wurtzel
See story about merger announcement from The Deal
See story about Pennsylvania legal changes from The Deal
See story about Sidhu's recent ouster from The Deal
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