Magazine article American Banker

Dissident Shareholders Could Complicate Union Planters' Florida Deal

Magazine article American Banker

Dissident Shareholders Could Complicate Union Planters' Florida Deal

Article excerpt

The day after Union Planters Corp. announced it would buy Capital Bancorp in Miami for $358 million, Union Planters cha irman Benjamin W. Rawlins Jr. flew there to start laying the groundwork for the transition.

Among the challenges he faces is appeasing suspicious shareholders, who question whether Capital Bancorp cut the best deal for shareholders. He also must wrestle with questions about who will run $1.9 billion-asset Capital, assuming the acquisition is completed as planned in the first quarter of 1998.

"There is a lot up in the air right now," said Union Planters spokesman Bill Andrews.

Union Planters apparently cut an attractive deal, at least financially, for its entry into Florida. Capital is a growing franchise in an attractive market, and the deal price of about $43 a share is well below the $50 many market observers expected the bank to fetch.

Joseph A. Stieven, an analyst with Stifel Nicolaus in St. Louis, gave the deal a thumbs-up. "It looks like a good transaction," he said.

Last month Capital announced its 24th consecutive quarter of earnings increases. Net income was up 21% to $6.2 million. Return on assets was 1.36%; return on equity 17.49%. But the core banking franchise is not the star at Capital. Boca Raton-based Capital Factors Holding Inc., of which the bank owns 81%, is a main driver of earnings. Capital Factors is one of the 10 largest factoring companies in the country. In the second quarter it contributed $2.6 million to Capital Bancorp's bottom line.

International banking is another big contributor. More than 20% of consolidated pretax earnings is derived from the international banking business, which includes confirming letters of credit issued by correspondent banks in Latin America; short-term trade refinancing; export related loans; and private banking initiatives.

Capital's 28 retail branches in Dade, Broward, and Palm Beach counties also are a plus and would give Union Planters a footprint in some wealthy areas. …

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