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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
People's BancShares, Inc.
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(Name of Registrant as Specified In Its Charter)
RCG Kingston Fund, Ltd.
RCG Kingston, L.L.C.
Kingston Fund, LP
Ramius Capital Group, LLC
C4S & Co., LLC
Jennings & Gillen
D.B. Jennings, Inc.
Donald B. Jennings
Thomas F. Gillen
The Partnership For Bank Capital, L.P.
Vincent A. Smyth and Mary E. Smyth
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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RCG Kingston, L.L.C.
Chrysler Center
666 Third Ave., 26th Floor
New York, NY 10017
May 23, 2000
TO OUR FELLOW PEOPLE'S BANCSHARES, INC.
SHAREHOLDERS
By this time, you should have received our proxy statement and the BLUE
proxy card to elect our nominees to the board of People's Bancshares, Inc.
("PBKB").
We hope our message to all our fellow shareholders is clear: IF ELECTED, THE
KINGSTON GROUP NOMINEES WILL SEEK TO CAUSE THE BOARD OF DIRECTORS TO RETAIN AN
INVESTMENT BANKING FIRM, WHICH WOULD BE CHARGED WITH REVIEWING ALL STRATEGIC
ALTERNATIVES AVAILABLE TO PBKB, INCLUDING A SALE OF THE COMPANY.
Here is the reason why we think it would be in PBKB's shareholders best
interest to pursue such alternatives. PBKB has consistently traded at a
discount to its peers as illustrated by the table on page two in our proxy
statement where PBKB's p/e ratio is compared to that of its peer banks. We
believe this is the result of the company's reliance upon a strategy of
borrowing funds and purchasing securities. The portfolio of securities at the
end of March had an unrealized loss of $48 million compared to the company's
shareholders' equity of $39 million.
In our opinion, investors view PBKB's strategy of leveraging (borrowing
funds) and buying securities as risky. This accounts for the sharp discrepancy
in valuation between PBKB's shares and its peers. Currently, PBKB is trading at
5.4x's the estimated 2000 earnings for the company of $3.10 per share (based on
the closing price of $16 7/8 as of 5/23/00). In contrast, PBKB's peer banks
currently trade at an average p/e of 8.6x's estimated 2000 earnings (as of
5/23/00). If the shares of PBKB traded on May 23rd at the average p/e for its
peers, the shares would have had a market value of $26.82 per share. THAT'S
APPROXIMATELY A 59% PREMIUM TO THE CURRENT MARKET VALUE FOR PBKB'S SHARES!/1/
With such an obvious gap in valuations levels, we think it is reasonable to
question management's reluctance to retain an investment banker to review all
strategic alternatives to the company. The basic question it seems to us is: If
the market does not value PBKB's shares at a level in line with its peers, then
why not find someone who will? OUR NOMINEES INTEND TO MAKE MAXIMIZING
SHAREHOLDER VALUE THE PRIMARY GOAL OF THE BUSINESS PLAN OF PBKB.
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/1/ As of the closing price of $16 7/8 on 5/23/00.
<PAGE>
Our nominees will bring substantial banking experience to the board. Vincent
A. Smyth is an attorney with his own law firm and was general counsel to
Bayside Federal Savings Bank. William G. Foster, Jr., is a consultant to
financial institutions with over twenty years of banking experience in asset
and liability management with Sovran Financial Corporation and First Florida
Banks, Inc. He is also the co-author of a textbook on mortgage-backed
securities, the principal type of security PBKB has used to build its large
securities portfolio. John R. Kennedy is a CPA and an independent financial
consultant with over twenty years of banking experience with Bank of Boston
where he rose to Senior Financial Officer--Global Division.
Lastly, the board's so called "offer" of a single board seat to settle this
proxy fight had a condition that we sign a "standstill agreement". We rejected
the offer because the company was unwilling to publicly commit to exploring all
strategic alternatives and retaining an investment banking firm. In addition,
we do not believe that a single director would necessarily ensure an adequate
voice for the shareholders who are interested in examining all strategies to
maximize shareholder value.
We make this pledge to you our fellow shareholders: We will not accept
greenmail. Nor will we accept any board seats in any settlement of this proxy
fight without a public commitment by the company to retain an investment banker
to seek all strategic alternatives to maximizing shareholder value.
Remember, the ultimate decision to sell PBKB rests with the shareholders who
must vote their approval before a transaction can be completed. We think the
shareholders are entitled to an opportunity to make that decision. Apparently
the board feels it is "inappropriate", as stated in the board's letter to us
last fall, for shareholders, the rightful owners of the company, to have the
opportunity to maximize shareholder value as demonstrated by their reluctance
to retain an investment banker to review all strategic alternatives including a
sale of the company.
We ask you to send the board a strong message by voting the BLUE proxy card
FOR our nominees. DO NOT RETURN THE WHITE PROXY CARD. IF YOU HAVE ALREADY
RETURNED THE WHITE CARD, YOU CAN STILL VOTE THE BLUE PROXY CARD.
Please read our proxy statement, and if you have any questions or comments,
either contact us at the numbers below or our proxy firm, Beacon Hill Partners,
Inc. at 800-755-5001.
Sincerely yours,
<TABLE>
<S> <C>
Thomas F. Gillen Donald B. Jennings
212-845-7942 212-845-7941
Fax: 212-845-7997 Fax: 212-845-7997
E-Mail: [email protected] E-Mail: [email protected]
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