Providian Acquisition Gets One Thumbs-Up

Institutional Shareholder Services, the influential proxy advisory service, recommended Thursday that shareholders approve Washington Mutual Inc.'s planned acquisition of credit-card issuer Providian Financial Corp.

The recommendation from the Rockville, Md., advisor comes about two weeks before Providian shareholders are set to vote on the $6.45-billion deal and about two weeks after mutual fund company Putnam Investments took the unusual step of declaring that it would oppose the merger.

Putnam says it owns about 7.5% of Providian’s stock; that makes it one of the company’s top shareholders.

A smaller proxy advisory firm, Egan-Jones Proxy Services, had recommended this week that clients vote against the deal. A third firm, Glass, Lewis & Co., hasn’t made a recommendation on how shareholders should vote at the Aug. 31 meeting.

The Washington Mutual-Providian deal, which was announced in early June, was the first in a wave of takeovers that has pushed the stand-alone credit card company to the brink of extinction. Within two months, Bank of America Corp. announced plans to snap up MBNA Corp., and a unit of HSBC Holdings is poised to buy Metris Cos.