But Sidhu told me this morning that he is disappointed in the low price Santander is paying. "In the 17 years I was CEO, we made (over 20% average) annual returns for our shareholders. In the last two years, Sovereign has lost 50%" yearly, Sidhu said. "I have tremendous admiration for Santander and for Sovereign and its people. But as a shareholder I'm very disappointed with the substantially lower-than-peer-group returns."
How much value has Sovereign lost as bank stocks plunged after Sidhu's departure? Santander spent $2.4 billion to buy just one-quarter of Sovereign three years ago, when it was $22/share . Now, it's agreed to pay just $2 billion for the remaining three-quarters, at around $3/share.
Irony 1: Sidhu lost his job because dissident shareholders, led by investor and current Sovereign director Ralph Whitworth, insisted in a loud, expensive campaign that the earlier Santander deal came too cheap.
Irony 2: Santander may be getting a bargain (Sidhu calls it "a steal"). Homebuyers are flooding back into the market, at least this week, as mortgage interest rates collapse to 5% and below. But it may come too late for some Sovereign workers: I hear the company circulated an internal memo this week announcing layoffs. No comment, so far, from bank bosses in Boston.