BBCN.O), a California-primarily based bank that caters primarily to the Korean-American community, stated it would purchase smaller sized rival Wilshire Bancorp Inc (WIBC.O) in a tax-totally free, all-stock deal valued at about $ 1 billion.
Wilshire shares have been up 6.1 pct at $ 12.49, slightly below the BBCN’s implied supply price of $ 13. BBCN shares have been down nearly 1.7 %.
BBCN’s move to buy Wilshire comes two weeks following Hanmi Financial Corp (HAFC.O) proposed to merge with BBCN in an all-stock deal valued at about $ 1.6 billion.
Hanmi’s proposal had implied a price tag of $ 19.98 per BBCN share.
Following Monday’s announcement by BBCN, Hanmi said it discovered the merger “surprising” as the buy price tag represents about five % discount to the proposal Hanmi made to BBCN.
“What is even a lot more disappointing is that BBCN and its advisors did not engage with us in any discussions just before getting into into an inferior agreement with Wilshire,” the organization mentioned in a statement.
On a conference call with analysts, BBCN Chief Executive Kevin Kim said the business had started negotiating with Wilshire even prior to Hanmi produced its supply. A deal with Hanmi carried “higher execution risk,” he added.
BBCN shareholders will own 59 % of the new firm, while Wilshire shareholders will personal 41 % soon after the deal closes, expected by mid-2016.
The combined organization will be the seventh largest bank in California and will have $ 12.3 billion in total assets and $ ten billion in deposits, the firms mentioned on Monday.
BBCN Chief Executive Kevin Kim will lead the combined firm, which will be renamed before the deal closes.
BBCN was advised by Keefe, Bruyette, & Woods Inc, even though Sandler O’Neill Partners was Wilshire’s adviser.
(Reporting by Sruthi Shankar in Bengaluru Editing by Sriraj Kalluvila and Anil D’Silva)