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December 23, 2005

Sovereign's shareholder battle escalates

Sovereign Bancorp struck back today against the latest move by Relational Investors LLC with a lawsuit seeking to block the rebellious shareholder's bid to remove the entire Sovereign board of directors.

The suit filed in federal court in New York seeks a declaratory judgment against Relational's claim that it can wage a proxy campaign to remove all of the Sovereign directors without cause and replace them with its own designees.

"We believe that Relational does not have the right under either Pennsylvania law of Sovereign's Restated Articles of Incorporation to propose a shareholder vote to remove, simultaneously and without cause, all members of the Sovereign board of directors," the company said in a statement announcing the lawsuit.

The legal action came a day after Relational announced it will seek removal of the full Sovereign board at the company's annual meeting next year.

Posted by   at 3:17 PM | Permalink