By Lisa Kerner
Charlotte, N.C., July 19 - Partners Trust Financial Group, Inc. agreed to merge into M&T Bank Corp. in a transaction worth an estimated $555 million. Both companies' boards of directors have approved the agreement.
M&T will acquire 33 branch locations in upstate New York, $2.3 billion in deposits and $2.3 billion in loans from Partners Trust. The transaction is expected to close within the next six months.
Under the terms of the companies' definitive merger agreement, Partners Trust shareholders will receive $12.50 per share. Each shareholder may choose to receive cash or stock, although in total 50% of the Partners Trust shares must be exchanged for M&T stock and 50% for cash. Elections are subject to allocation and proration.
A termination fee of $20.828 million is included in the agreement.
"Like us, M&T is headquartered in upstate New York, and they know what it takes to live and work here. At the same time, they can provide our customers with a wider array of products and services and a wider network of branches and ATMs," Partners Trust president and chief executive officer John A. Zawadzki said in a company news release.
"We expect this transaction to be accretive to net operating earnings per share in 2008," M&T chief financial officer Rene F. Jones added. "We estimate that the return on this investment will be in the mid-teens. This comfortably exceeds our cost of capital, and given the low-risk nature of the transaction, meets our investment criteria."
M&T is a bank holding company based in Buffalo. Partners Trust, located in Utica, N.Y., is the holding company for Partners Trust Bank.
| Acquirer: | M&T Bank Corp.
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| Target: | Partners Trust Financial Group, Inc.
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| Transaction total: | $555 million
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| Price per share: | $12.50 in cash or M&T common stock
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| Announcement date: | July 19
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| Termination fee: | $20.828 million
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| Expected closing: | Within six months
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| Stock price for acquirer: | NYSE: MTB: $110.50 on July 18
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| Stock price for target: | Nasdaq: PRTR: $10.01 on July 18
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