An American businessman has arrived in Bermuda in a last-ditch bid to stop the sale of the Bank of Bermuda to a foreign firm.

Bank shareholders will today vote on the $1.3 billion sale to banking giant HSBC - but investment professional Walter Lipman is hopeful the deal can be blocked.

Mr. Lipman flew into Bermuda from New York on Saturday to meet with about 20 other shareholders opposed to the sell-off. He will also be on hand to cast his vote against the sale of the bank at this afternoon's special general meeting.

Mr. Lipman believes the price tag being offered by HSBC is too low and that the sale could also have dire consequences for the Island.

And he told The Royal Gazette he believed the sale was not “a fait accompli”.

The 26-year veteran of the securities industry, who said his bank shares figure “prominently” in his retirement fund, said his aim was “to try to avert HSBC acquiring the Bank of Bermuda for an unfair consideration”.

He said other banks comparable to the Bank of Bermuda had changed hands at multiples of 20 to 30 times earnings. He said the Bank of Bermuda pricing, at $45 per share or 16.35 times the previous year's earnings, was far below the $55 to $82 per share range the bank could have fetched if sold in that 20 to 30 times earnings range.

And he pointed out that the actual price being paid for the bank was even lower, with HSBC only paying $40 per share in the sale and the Bank of Bermuda making up the balance of the $45 purchase price with a $5 special dividend to shareholders.

“This is the bank financing the last $5 of its own demise,” he said.

But price is far from being Mr. Lipman's only objection to the sale. He expressed grave concerns over what the sale could mean for the Island.

“For certain types of investors, Bermuda companies are trading at incredibly low valuations, offer wonderful balance sheets and are monopolies or oligarchy businesses. And all of that comes with a moat around it,” he said.

Mr. Lipman said he was concerned about HSBC's propensity to outsource jobs. He cited the recent axing of 4,000 jobs in the UK which were sent to India where operation and staffing costs are much lower.

“Don't get me wrong, HSBC is a fine bank. But for me - and this should be the first objection of anyone in Bermuda - HSBC exports employment to the cheapest possible venue. I would think Government would be concerned about doing anything to decimate the largest private employer in Bermuda,” he said.

Mr. Lipman made his investment in the bank after it made its settlement in the Cash 4 Titles scandal in 2001. This was something he said was a “major blow” to the bank's reputation but not its financial standing. And he saw the investment as sound as “reputations can be rebuilt as long as finances are fine, which was exactly the case here”.

“This was a great investment that, with the fullness of time, would have become even better. It is the fullness of time that the current management are trying to deprive me of,” he said.

He also disputed bank management's repeated claim in recent months that the sale to HSBC could spell big business opportunities in the Island's re/insurance sector.

“The reasons put forward for this being good for Bermuda can with alacrity be debunked,” he said.

He pointed out that the Island's re/insurance sector would already have a banking relationship with HSBC and there was no reason why they would shift that business from HSBC in London or New York to the Bermuda branch of HSBC.

Although there is widespread speculation that the meeting today will see shareholders push through the deal - a number of large shareholdings have already confirmed they will be voted in favour of the deal, including the 3.16 million shares (or 11 percent holding) held by the Bank of Bermuda Foundation - Mr. Lipman said he did not see it as a done deal.

“This may be less of a certainty than the bank wants to admit. I think they are running scared. Ask yourself, if this was a fait accompli, why would management hold dog and pony shows repeatedly,” he said, referring to investor meetings and speaking engagements carried out by senior management since the sale was announced last October.

“Ask yourself, if this was a fait accompli, how come Sir John Bond showed up before the sale?” The powerful chairman of the bank made a trip to Bermuda to meet with stakeholders at the beginning of the month.

“$1.3 billion amounts to slightly more than 17/100s of one percent of HSBC's total 2002 assets. Ask yourself why Sir John hauled his butt here from London, for what is (to him) a piddling business.”

Mr. Lipman dismissed arguments put forward by others supporting the sale who claim the bank's share price would plummet and the Island's reputation would be damaged if the sale is scuppered today.

“As a bank it has to do what it does and it will do that Tuesday morning, no matter who owns it,” he said.

And he called for shareholders not to be seduced by simple arguments such as “how can you not be in favour of the second largest bank coming to our shores”.

“It may appear to be a good thing until you realise that any increases in deposits will be sent to loans in corners of the globe that are most profitable for HSBC. With proper analysis, what is in this for Bermuda is less than nothing”.

As for the bank's assertion that HSBC would throw equal support behind its charitable arm, the Bank of Bermuda Foundation, Mr. Lipman said “Any vectors in terms of support (of the foundation) are less than meaningless”.

Although on the Island to contest the sale, Mr. Lipman said he did not plan to cause a stir at today's meeting.

He said if he did decide to speak during the time set aside for shareholders to make comments or ask last questions it would be brief.

“If I choose to speak it will not be a huge speech. It would just be to say that this is selling the Hope Diamond for 34 cents,” he said.

*Today's meeting, in which investors will vote for or against the bank's proposed sale to multinational banking giant HSBC Plc, begins at 2 p.m. in the Harbourview Ballroom at the Hamilton Princess The results of the vote are expected to be announced at the end of the meeting, although the bank said timing of the announcement would depend on the length of the meeting and how many votes had to be counted.

Some votes have already been received by the bank after some investors chose to vote by proxy. The bank declined to say how many votes were received by proxy.