Relational Challenges Pennsylvania Legislation: Constitutional Mandates Sidestepped for Sovereign

Relational Investors LLC, the largest shareholder ofSovereign Bancorp, Inc. (NYSE: SOV) with approximately 8.4% of theoutstanding shares, announced today that it has filed a lawsuitagainst the Commonwealth of Pennsylvania seeking to invalidate Act 6of 2006, the recently enacted special legislation passed for theprivate benefit of the management and board of directors of Sovereign.The suit also names Edward G. Rendell, the Governor of theCommonwealth of Pennsylvania, Robert C. Jubelirer, the President ProTempore of the Senate, and John M. Perzel, the Speaker of the House ofRepresentatives, as defendants in their official capacities.

The lawsuit maintains that Act 6, passed by the Legislature asSenate Bill 595, was enacted in less than 48 hours as part of asecretive process designed to avoid fair disclosure and deliberationin violation of the Pennsylvania Constitution. Sovereign lobbiedextensively to procure this legislation to prevent Relational from theproper exercise of its shareholder rights and to thwart Relational'sclaims in pending litigation with Sovereign in Federal Court.

Many of the Pennsylvania legislators who voted in favor of thebill were not physically present for the vote and had no knowledge ofthe contents of the bill or had incorrectly been led to believe thatthey were helping Sovereign defend against an attempted takeover byRelational, something Relational has never attempted and is legallyprohibited from doing. Furthermore, Senator Waugh, the originalsponsor of SB 595, withdrew his sponsorship and voted against thebill.

In commenting on the suit, Ralph V. Whitworth, Principal ofRelational Investors, said: "This legislation was passed atSovereign's urging under the cover of darkness without properdeliberation. In one fell swoop Sovereign and the Legislaturesignificantly impaired the rights of Sovereign's approximately 87,000shareholders, not to mention the rights of all shareholders of allPennsylvania chartered companies. We believe that all this was done toinsulate Sovereign's directors from being held accountable bySovereign's shareholders. These actions dealt a devastating blow toPennsylvania's shareholder rights and made a mockery of our system ofrepresentative government."

The suit seeks a declaratory judgment that Act 6 of 2006, in wholeor part, violates the Pennsylvania Constitution and is, therefore,null and void.

About Relational Investors

Relational Investors LLC is a registered investment advisor andasset management firm located in San Diego, California managing $6.2billion. Additional information about Relational is available on theirwebsite at www.rillc.com.

Further Information About Relational's SEC Filings

On October 20, 2005, Relational, together with a number ofaffiliated persons and entities that may be deemed "participants" forpurposes of the solicitation rules of the Securities and ExchangeCommission ("SEC"), filed a preliminary proxy statement on Schedule14A with the SEC relating to a possible solicitation of proxies fromthe shareholders of Sovereign Bancorp, Inc. ("Sovereign") inconnection with Relational's nomination of Ralph Whitworth and DavidBatchelder for election to Sovereign's board of directors atSovereign's 2006 Annual Meeting of shareholders. On December 13, 2005,Relational filed with the SEC a revised preliminary proxy statement.Relational will prepare and file with the SEC a definitive proxystatement relating to their nomination of Messrs. Whitworth andBatchelder and may file other proxy solicitation materials. RELATIONALANTICIPATES THAT IT WILL FURTHER REVISE AND FILE THE PRELIMINARY PROXYSTATEMENT IN RESPONSE TO SEC COMMENTS AND SHAREHOLDERS ARE URGED TOREAD THE PRELIMINARY PROXY STATEMENT AS REVISED (AND THE DEFINITIVEPROXY STATEMENT, WHEN IT BECOMES AVAILABLE) BECAUSE IT CONTAINSIMPORTANT INFORMATION REGARDING RELATIONAL'S NOMINATION OF MESSRS.WHITWORTH AND BATCHELDER FOR ELECTION AS DIRECTORS. The preliminaryproxy statement is, and the revised preliminary proxy statement andthe definitive proxy statement (when they become available) will be,available for free at www.sec.gov, along with any other relevantdocuments. You may also obtain a free copy of the revised preliminaryproxy statement, or the definitive proxy statement (when it becomesavailable), by contacting Maudie Holland of Relational at (858)704-3321, or by sending an email to maudie@rillc.com. Informationregarding the names, affiliation, and interests of persons who may bedeemed to be participants in our solicitation of proxies ofSovereign's shareholders is available in the preliminary proxystatement filed with the SEC on October 20, 2005 and the revisedpreliminary proxy statement filed on December 13, 2005.