Magazine article American Banker

Buying Premier Frees Banc One to Do More Big Merger Deals

Magazine article American Banker

Buying Premier Frees Banc One to Do More Big Merger Deals

Article excerpt

Banc One Corp.'s purchase of Louisiana's Premier Bancorp clears the way for the Columbus, Ohio-based bank to pursue other deals and gives Premier shareholders a chance to benefit from any appreciation in Banc One stock.

The transaction, announced late Wednesday, also gives Banc One "very low-cost deposits and a very good position" in Louisiana, according to Interstate Johnson Lane analyst John Mason.

The deal unfolded pretty much as Wall Street had expected: $5.5 billion- asset Premier received a higher price than was due under a 1991 option agreement, although the extra compensation turned out to be a tad lower than some analysts once hoped.

"It's reasonably satisfactory," said Legg Mason's David B. Sochol. "The deal pricing was certainly good from Banc One's perspective."

Banc One said it would purchase Baton Rouge-based Premier for $20.15 a share in stock, or 1.4 times book value, at a time when two times book is the norm. The 1991 agreement was based on a 125% of book exchange ratio.

"We were able to increase the original offer price based on the outstanding job Premier has done improving both the credit quality and performance of their franchise," said Banc One chairman and chief executive John B. McCoy.

Premier chairman and CEO G. Lee Griffin said he was satisfied with the 16% higher price negotiated with Banc One, whose stock has lagged in the wake of disappointing 1994 earnings.

"We would anticipate the value of their stock going up and we would benefit," said Mr. …

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