By Lisa Kerner
Charlotte, N.C., Aug. 16 - Fifth Third Bancorp agreed to acquire First Charter Corp. in a cash and stock deal valued at $31.00 per share, or $1.09 billion.
First Charter stockholders will receive 70% of their payment in Fifth Third common stock and 30% in cash. A $32.5 million termination fee payable by First Charter is included in the deal.
"This furthers our penetration into fast-growing Southeastern metropolitan markets at a reasonable price," Fifth Third president and chief executive officer Kevin Kabat said in a company news release.
"The addition of First Charter provides us with an entry into the attractive North Carolina market and further diversifies our footprint into new, higher growth markets."
Charlotte, N.C.-based First Charter is a regional financial services company that operates 57 branches in North Carolina and 2 in suburban Atlanta.
"We believe this combination is a great result for our shareholders, customers and employees, and look forward to becoming part of the Fifth Third team," First Charter president and CEO Bob James added.
James will join Fifth Third as president of the Charlotte affiliate.
Following the transaction's close, expected in the first quarter of 2008, Fifth Third Bank will add some $4.9 billion in assets and $3.2 billion in deposits.
First Third said it expects the transaction to be dilutive to 2008 earnings per share by about 2%, to be relatively neutral to 2009 earnings per share and to be modestly accretive to 2009 earnings per share. In addition, the company expects the merger to generate $35 million of pre-tax annual expense reductions phased in over two years, with merger-related one-time charges of up to $61 million pre-tax, or $39 million after tax.
Helms Mulliss & Wicker, PLLC and Keefe, Bruyette & Woods advised First Charter. Fifth Third was advised by Hugh L. McColl, Jr. of McColl Partners and Goldman Sachs & Co.
Fifth Third Bancorp is a diversified financial services company based in Cincinnati.
| Acquirer: | Fifth Third Bancorp
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| Target: | First Charter Corp.
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| Transaction total: | $1.09 billion
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| Price per share: | $31.00 (70% Fifth Third common stock and 30% cash)
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| Termination fee: | $32.5 million
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| Announcement date: | Aug. 16
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| Expected closing: | First quarter of 2008
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| Stock price for acquirer: | Nasdaq: FITB: $37.38 on Aug. 15
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| Stock price for target: | Nasdaq: FCTR: $20.25 on Aug. 15
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