Italian Bank Boosts Bid for Irving : Banca Commerciale Now Seeking 51% Stake in N.Y. Firm

Italy’s second-largest bank said Monday that it was seeking to acquire a majority stake in Irving Bank Corp., but analysts said swaying shareholders away from Bank of New York Co.’s competing hostile bid remains an uphill battle.

Banca Commerciale Italiana SPA, which had sought a 45% stake in Irving, said it will seek to purchase 9.5 million Irving shares, or about 51% of the New York-based bank.

The state-run Italian bank is offering $75 a share, the same price as under its previous plan that sought to purchase 8.5 million shares. In addition, Banca Commerciale said it would pay interest on the per-share purchase price from May 31 until the deal closes.

Banca Commerciale also said it “continues to contemplate” paying Irving shareholders a special $10-a-share dividend on remaining shares if it is successful in acquiring the bank.

Irving’s board approved the amended offer and recommended shareholders tender to it, but analysts were less enthusiastic.

“I don’t think most investors will bother studying it,” said Virginia Adair, an analyst at Merrill Lynch & Co. “I think it will be treated as fairly insignificant.”

Irving said the offer, which hinges on a complex restructuring, has a blended value of between $65.20 and $72.55 a share, a slight increase over its previous offer.

Bank of New York spokesman Owen Brady said his company would not increase its bid, adding that “the stock market has chosen to ignore BCI’s proposal.”

In composite trading on the New York Stock Exchange, Irving rose 12.5 cents to close at $61.625 a share; Bank of New York rose 12.5 cents to close at $30.50 a share.

Bank of New York, which holds a 5% stake in Irving, is offering $15 in cash and 1.575 shares of its stock for each of Irving’s 18.5 million shares outstanding, or about $1.08 billion.

The bank also is waging a proxy fight by running a slate of 16 candidates for election to Irving’s board at a shareholders meeting scheduled for May 6.

As of last Friday, about 10 million Irving shares had been tendered under Bank of New York’s buyout offer of roughly $64 a share. Those shares, coupled with the 888,634 shares Bank of New York already owns, give the bank a 59.2% stake in Irving, the company said.

Irving Chairman Joseph Rice said in a statement that the bank’s board “greatly appreciates the willingness of BCI to improve its offer.”