Magazine article American Banker

Shawmut Makes Second Foray into Rich Connecticut Market

Magazine article American Banker

Shawmut Makes Second Foray into Rich Connecticut Market

Article excerpt

Shawmut Makes Second Foray Into Rich Connecticut Market

BOSTON -- Shawmut Corp., the $7.9 billion-asset Boston-based bank holding company, Wednesday made its second major foray into Connecticut by announcing plans to acquire Fidelity Trust Co. of Stamford for about $49.9 million in stock.

Fidelity Trust, with total assets of $232 million, serves the Stamford-Darien market with nine banking offices. The acquisition of Fidelity Trust along with Shawmut's recent acquisition of Home Bank and Trust Co. of Meriden, Conn., gives it a strong presence in the lucrative Hartford-Fairfield County corridor.

Fidelity Trust holders will receive $124.75 worth of Shawmut common shares for each share of Fidelity. The number of Shawmut shares to be exchanged will be no fewer than 2.23 or more than 3.12 for each Fidelity share. Shawmut common closed Tuesday at $48.88.

The price is about 2.9 times March 31 book value and 22 times 1985 earnings. The final price level reflects an allowance for the appreciated value of certain of Fidelity's assets, Shawmut said.

"We are particularly pleased to enter Fairfield County, which we recognize as one of the most attractive and fastest-growing banking markets in the nation," John P. LaWare, Shawmut chairman and chief executive, said in a statement.

David V. Andrews, president and chief executive of Fidelity Trust, said his bank agreed to sell for two reasons. First, the stockholders stand to make a substantial gain on the deal. …

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