Wednesday, June 15, 2005
BNP Paribas Pays 1.12 Billion Euros for US bank Commercial Federal
BNP Paribas pays 1.12 billion euros for US bank Commercial Federal
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Tue Jun 14, 4:18 AM ET
PARIS (AFP) - French banking group BNP Paribas said that it would acquire US retail bank Commercial Federal for 1.12 billion euros (1.36 billion dollars) under an agreed bid subject to regulatory approval.
BNP Paribas said that the purchase, at a premium of 27.0 percent to the average price of Commercial Federal stock, over the last six months, was to further its strategy of expanding in retail banking in the United States.
Shareholders in Commercial Federal would receive 34.50 dollars per share on the basis of 34.0 dollars in cash and an exceptional dividend of 50 cents per share.
BNP Paribas said that it was mounting the deal via its US subsidiary Bank of the West, and that it expected to save 54 million dollars a year before tax through economies of scale arising from the acquisition. The deal would create value from 2006.
Bank of the West is a subsidiary of BNP Paribas subsidiary BancWest. Once the takeover had been completed, BancWest would manage 4.2 million accounts through 739 branches. Banking under the name Commercial Federal would come under the brand of Bank of the West.
The deal was expected to be completed in the fourth quarter of 2005, but was subject to approval from shareholders in Commercial Federal and from US authorities.
BNP Paribas said that the board of Commercial Federal had approved the offer for 100 percent of the business. The offer had also been approved by the boards of BNP Paribas, Bancwest, Bank of the West and of Commercial Federal.
BancWest operated through 541 branches in 17 states in the west of the United States, and mainly in California and Hawai under the brands of First Hawaiian Bank in Hawai and Bank of the West on the US mainland, BNP Paribas said.
Commercial Federal, based in Omaha, Nebraska, was quoted on the
New York Stock Exchange operated through 198 branches in the United States and made a net profit in 2004 of 76 million dollars, BNP Paribas said.