By Lisa Kerner
Charlotte, N.C., July 27 - First Niagara Financial Group, Inc. announced it will acquire Harleysville National Corp. in an all-stock transaction valued at about $237 million, or $5.50 per share.
Harleysville shareholders will receive 0.474 shares of First Niagara common stock for each Harleysville share owned.
First Niagara said the offer is a premium of approximately 37.5% to Harleysville's closing price of $4.00 per share on Friday.
The exchange ratio is based on First Niagara's five-day average closing stock price of $11.60 on Wednesday.
Both companies' boards of directors have approved the deal, which is expected to close in the first quarter of 2010, a First Niagara news release said.
"This move is a terrific next step in our strategy to leverage our strong capital position in markets with attractive demographics and long-term growth potential, where we can profitably play offense," First Niagara president and chief executive officer John R. Koelmel said in a company news release.
"The communities served by Harleysville are perfect complements to First Niagara's stable and resilient markets in Upstate New York and Western Pennsylvania," Koelmel said.
First Niagara expects the merger to be accretive to its diluted earnings per share by approximately 14% in 2011.
According to First Niagara, it will maintain all Harleysville and East Penn branches as well as Harleysville's growing commercial banking and wealth-management business.
Sandler O'Neill and Partners, LP and Keefe Bruyette and Woods, Inc. advised First Niagara on the transaction, while Harleysville was advised by J.P. Morgan.
Harleysville National is the holding company for Harleysville National Bank and Trust, East Penn Bank, Millennium Wealth Management and Cornerstone Cos. The company is based in Harleysville, Pa.
First Niagara is the holding company for First Niagara Bank based in Lockport, N.Y.
| Acquirer: | First Niagara Financial Group, Inc.
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| Target: | Harleysville National Corp.
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| Announcement date: | July 27
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| Price per share: | 0.474 shares of First Niagara
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| Expected closing: | First quarter of 2010
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| Stock price of acquirer: | Nasdaq: FNFG: $11.74 on July 24
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| Stock price of target: | Nasdaq: HNBC: $4.00 on July 24
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