Pacific Capital Bancorp, parent of Santa Barbara Bank & Trust, wants to execute a reverse split of its stock to bolster its sagging stock price.
The region’s biggest independent banking company said Aug. 17 that it will hold a special shareholder meeting in Santa Barbara on Sept. 29 to vote on the reverse split. The meeting was announced in a preliminary proxy statement filed with the Securities and Exchange Commission and posted on its Web site.
The company said the ratio for the exchange of stock could be from 3-to-1 up to 10-to-1. In a 10-to-1 reverse split, for example, a shareholder who owns 10 shares before the split would own only one share afterward. The company said it believes the smaller number of shares will make it more attractive to potential investors.
In the same announcement, Pacific Capital also said it would ask shareholders to approve an increase in the authorized number of shares of common stock from 100 million to 500 million. The proxy statement said that one reason for increasing the number of shares was to provide for the issuance of additional shares in the future as part of its strategic plan announced late last month.
The company said that increasing the number of shares could be “construed as having an anti-takeover effect” but said it was not in response to any takeover activity.
Once authorized, the reverse split could take place at any time before August 2010, the statement said. Shareholders as of Aug. 21, 2009 will be eligible to vote at the special meeting.
The proxy statement indicated that Barclay’s Global Investors and the Santa Ynez Band of Chumash Indians owned more than 5 percent of its common stock as of June 30.