Fifth Third to offer cash, stock in exchange for $1.1 billion 8.5% cumulative preferreds

By Jennifer Chiou

New York, May 20 - Fifth Third Bancorp said it plans to offer a cash incentive to encourage conversion into stock of its $1.1 billion of series G convertible preferred depositary shares.

The bank said it will offer holders a $30.00 cash payment per depositary share in addition to shares at the regular conversion rate.

It added that the cash payment represents about 3.5 years of dividends on the series G depositary shares.

The company noted that there are 11,075,000 series G depositary shares outstanding, convertible into 95.7 million Fifth Third shares at $11.575 per share under certain circumstances.

Based on the company's May 18 closing share price of $7.99, the exchange offer would value each series G depositary share at $99.03, consisting of $69.03 in parity value of the underlying common shares and the remainder in cash.

Fifth Third said that the depositary shares closed at a price of $91.69 on Monday.

D.F. King & Co., Inc. is the information agent (800 207-3158 or call collect 212 269-5550).

Funding for the cash portion will come from the sale of $750 million of common shares.

The share sale and the exchange are intended to increase the bank's Tier 1 common equity beyond the $1.1 billion required by the recent government stress test.

Fifth Third Bancorp is a diversified financial services company based in Cincinnati.

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