At the end of April, Thomas Renyi, chief executive of Bank of New York, and several senior colleagues set off across America to persuade institutional shareholders in Mellon Bank of the value in the merger proposals Bank of New York first made public on April 22 in a letter to Mellon's directors. By appealing over the head of Mellon CEO Frank Cahouet - who swiftly rejected the proposal - Bank of New York has come within an ace of that rarest of things in the recent tumble of bank mergers: a hostile deal.
A full-blown hostile tender offer for Pittsburgh-based Mellon Bank is impossible given the oddities of Pennsylvannia law. But Bank of New York clearly grew impatient when long-running merger talks foundered. The stumbling block then, Bank of New York says, was "issues of management structure," for which read: what jobs senior Mellon executives might take and for how long.
The biggest issue in even the most compelling merger is making sure the top men work out satisfactory face-saving deals for themselves. Cahouet was set to retire in a year anyway. To proceed without resolving this first, Bank of New York must have been getting desperate.