— Represents a 32% premium to
FCAL's May 3 closing price — — Combined company
would have nearly $7.5 billion in assets —
LOS ANGELES, May 8, 2012 (GLOBE NEWSWIRE) --
PacWest Bancorp (Nasdaq:PACW) today announced that
on May 3, 2012, it submitted to the board of First California
Financial Group, Inc. ("FCAL") a merger proposal in which FCAL
shareholders would receive $7.25 in PacWest Bancorp common stock
for each FCAL share they hold. PacWest's offer represented a 32%
premium to FCAL's closing price on May 3, 2012.
Matt Wagner, Chief Executive Officer of PacWest
Bancorp, commented, "We believe the combination of PacWest Bancorp
and First California is highly compelling for the stockholders of
both organizations. On a pro forma basis, the combined organization
would have nearly $7.5 billion in assets, a strong franchise with
locations throughout California and an enhanced platform to serve
its customers."
Mr. Wagner continued, "We strongly prefer to
conduct negotiations privately and have a long history of
successful acquisitions completed on this basis. We've made this
disclosure reluctantly, and only after First California summarily
rejected our proposal and ignored our previous efforts to engage
with them in discussions. Given the significant premium we have
offered, we wanted to make sure all FCAL constituents are aware of
this attractive proposal. We are excited about the prospects for a
combination of PacWest and FCAL and plan to work diligently toward
a transaction."
In light of the compelling strategic rationale for the
transaction, and the attractive financial terms for FCAL
stockholders, PacWest communicated its current proposal to the FCAL
Board of Directors on May 3, 2012 and asked that FCAL agree to
commence discussions on the basis of this proposal by the afternoon
of May 8, 2012. FCAL instead cursorily determined not to proceed
with good faith discussions on our proposal, and as a result
PacWest determined to release the May 3 letter publicly:
May 3, 2012
Mr. Robert E. Gipson, Chairman of the Board Mr. C.G. Kum,
President and Chief Executive Officer First California Financial
Group, Inc. 3027 Townsgate Road, Suite 300 Westlake Village,
California 91361
Gentlemen:
We are writing to again reiterate our strong interest in the
mutually beneficial combination of PacWest Bancorp ("PACW") and
First California Financial Group, Inc. ("FCAL"). We hope and expect
that our prior outreach and indications of interest (including our
prior letters and Proposed Terms and Conditions, dated November 31,
2011 and January 27, 2012) have made clear to you and your Board
the sincerity of our interest. We are disappointed and, quite
frankly, surprised by the lack of response to our good faith
attempts to engage in friendly discussions, particularly in light
of the vocal sentiment of a number of your significant
stockholders.
We have continued to follow FCAL and its ongoing results and
condition, as well as its future prospects and potential fit as a
member of the PACW family. Accordingly, we are pleased to present
to the Board a revised offer of $7.25 per share in PACW common
stock to acquire 100% of the outstanding FCAL capital stock (and
rights to acquire FCAL stock). The value of PACW for purposes of
the exchange would be subject to a mutually agreed upon collar
mechanism to protect both parties. This offer represents an
extraordinarily compelling premium of 32% to the FCAL closing price
on May 3, 2012. This proposal would also provide your stockholders
with a tax-free exchange, and the opportunity to benefit from the
future growth and success of our combined companies from the
advantageous starting point of a premium exchange ratio. In making
this proposal, our Board believes, and expects that your
stockholders would agree, that the combination of our two banks is
in the best interests of both of our stockholders, customers,
employees and other stakeholders and presents a unique opportunity
to create a valuable community banking franchise possessing the
capital resources, scale, management team and financial strength
necessary to thrive in the current competitive environment. On a
pro forma basis, the combined company would have approximately $7.5
billion in assets.
We have undertaken an extensive and careful review of FCAL based
solely on publicly available information. As part of a private
negotiation, we would expect to conduct due diligence on an
expedited basis pursuant to a customary mutual non-disclosure
agreement and reach terms on a mutually satisfactory merger
agreement containing customary terms.
We would also like to reiterate our belief that a transaction
between PACW and FCAL possesses the added and significant benefit
of PACW's highly successful track record of completing
transactions, including 23 acquisitions of other financial
institutions since 2000. Importantly, we and our advisors have also
carefully reviewed the regulatory implications of this transaction
and are confident we will receive all required approvals without
delay.
We intend to devote all necessary resources towards entering
into a mutually beneficial transaction with FCAL on an expedited
basis. In light of our anticipated considerable expenditures of
time and money, we request that beginning on the date of your
countersignature to this letter, for a period of 30 days (1) each
of PACW and FCAL deal, and ensure that its respective
representatives deal, exclusively with the other with respect to
any potential change of control or similar fundamental transaction,
and (2) neither PACW nor FCAL be permitted to disclose this
proposal, or that discussions regarding a potential transaction or
this proposal are taking place (other than solely to the extent
required by law, applicable regulation or upon regulatory request,
provided that each party apprises the other of any such disclosures
to the extent practicable), and that both parties promptly enter
into a customary mutual nondisclosure agreement. Of course, both
parties understand that these exclusivity obligations will
terminate immediately upon the date that PACW and FCAL mutually
agree to terminate discussions and, as expressed above, PACW is
confident that a mutually satisfactory definitive agreement can be
reached well in advance of the expiration of the 30 day exclusivity
period.
As you know, our preference has been and remains to reach a
mutually beneficial, negotiated transaction promptly. However, in
light of our continued expenditures and dedication of substantial
resources without reciprocation to date, absent a response from
FCAL on or prior to 3pm Pacific Time on Tuesday May 8, 2012
expressing a willingness to enter into exclusive discussions as
described above, we will be compelled to withdraw this offer for a
negotiated transaction. At that time, we would have no choice but
to consider alternatives to ensure that the compelling nature of
our proposal is communicated to your stockholders.
As you can appreciate, we are submitting this proposal to you
and your Board in confidence and, other than the fifth paragraph of
this letter, which is intended to be binding and enforceable upon
your countersignature to this letter on or prior to 3pm Pacific
Time on Tuesday May 8, 2012, this letter does not create or
constitute any legally binding obligation by PACW regarding the
proposed transaction.
PACW's Board fully supports and is committed to this
transaction. We sincerely hope that you and your Board will
share our enthusiasm for this unique opportunity. Please do
not hesitate to contact me at (310) 728-1020 with any
questions. I can also be reached via email at
[********]. We look forward to hearing from you shortly.
Very truly yours,
Matthew P. Wagner Chief Executive Officer
PacWest's merger proposal is subject to satisfactory completion
of due diligence by PacWest, negotiation of a satisfactory merger
agreement, the receipt of applicable board and shareholder
approvals and the receipt of customary regulatory approvals.
ABOUT PACWEST BANCORP
PacWest Bancorp ("PacWest") is a bank holding company with $5.4
billion in assets as of March 31, 2012, with one wholly-owned
banking subsidiary, Pacific Western Bank ("Pacific Western").
Through 76 full-service community banking branches, Pacific Western
provides commercial banking services, including real estate,
construction and commercial loans, to small and medium-sized
businesses. Pacific Western's branches are located throughout
California in Los Angeles, Orange, Riverside, San Bernardino, Santa
Barbara, San Diego, San Francisco, San Luis Obispo, San Mateo and
Ventura Counties. Through its subsidiaries, BFI Business
Finance and Celtic Capital Corporation, and its divisions, First
Community Financial and Pacific Western Equipment Finance, Pacific
Western also provides working capital financing and equipment
leasing to growing companies located throughout the United States,
with a focus on the Southwestern U.S., primarily in Arizona,
California, Utah and Texas. Additional information regarding
PacWest Bancorp is available on the Internet at
www.pacwestbancorp.com. Information regarding Pacific Western Bank
is also available on the Internet at
www.pacificwesternbank.com.
ADDITIONAL INFORMATION
This communication is neither an offer to purchase or exchange
nor a solicitation of an offer to sell securities of PacWest or
FCAL. Subject to future developments, additional documents
regarding the transaction may be filed with the Securities and
Exchange Commission (the "SEC"). INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ SUCH DISCLOSURE DOCUMENTS REGARDING THE PROPOSED
TRANSACTION CAREFULLY IN THEIR ENTIRETY, IF AND WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and securityholders may obtain a free copy of the
disclosure documents (when they are available) and other documents
filed by PacWest with the SEC at the SEC's website at www.sec.gov.
The disclosure documents and other documents that are filed with
the SEC by PacWest may also be obtained PacWest's website at
www.pacwestbancorp.com or obtained for free from PacWest by
directing a request to PacWest Bancorp c/o Pacific Western Bank,
275 North Brea Boulevard, Brea, CA 92821. Attention: Investor
Relations. Telephone 714-671-6800.
PacWest and certain of its directors and executive officers may
be deemed to be participants in any solicitation of proxies from
FCAL's stockholders in respect of the proposed transaction between
PacWest and FCAL. Information regarding PacWest's directors and
executive officers is available in its proxy statement for its 2012
annual meeting of stockholders, which was filed with the SEC on
April 6, 2012. This document can be obtained free of charge from
the sources indicated above. Additional information regarding the
interests of these participants in such proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in any proxy statement and
other relevant materials to be filed with the SEC in connection
with the proposed transaction.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking
information about PacWest that is intended to be covered by the
safe harbor for "forward-looking statements" provided by the
Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact are forward-looking
statements. Such statements involve inherent risks and
uncertainties, many of which are difficult to predict and are
generally beyond the control of PacWest. We caution readers that a
number of important factors could cause actual results to differ
materially from those expressed in, implied or projected by, such
forward-looking statements. Risks and uncertainties include, but
are not limited to: lower than expected revenues; credit quality
deterioration or a reduction in real estate values could cause an
increase in the allowance for credit losses and a reduction in net
earnings; increased competitive pressure among depository
institutions; the possibility that PacWest and FCAL do not proceed
with the proposed transaction, failure to receive regulatory and
shareholder approvals for the proposed transaction, PacWest's
ability to successfully integrate FCAL or achieve expected
beneficial synergies and/or operating efficiencies within expected
time-frames or at all; settlements with the FDIC related to our
loss-sharing arrangements from the Los Padres Bank and Affinity
Bank acquisitions; the possibility that personnel changes will not
proceed as planned; the cost of additional capital is more than
expected; a change in the interest rate environment reduces net
interest margins; asset/liability repricing risks and liquidity
risks; pending legal matters may take longer or cost more to
resolve or may be resolved adversely to PacWest; general economic
conditions, either nationally or in the market areas in which
PacWest does or anticipates doing business, are less favorable than
expected; environmental conditions, including natural disasters,
may disrupt our business, impede our operations, negatively impact
the values of collateral securing PacWest's loans.
For a more complete discussion of risks and uncertainties,
investors and security holders are urged to read PacWest Bancorp's
and FCAL's respective annual report on Form 10-K, quarterly
reports on Form 10-Q and other respective reports filed by
PacWest and FCAL with the SEC. The documents filed by PacWest
and FCAL with the SEC may be obtained at the SEC's website at
www.sec.gov. The documents filed by PacWest may also be
obtained at PacWest's website at www.pacwestbancorp.com or obtained
free of charge from PacWest by directing a request to: PacWest
Bancorp c/o Pacific Western Bank, 275 North Brea Boulevard, Brea,
CA 92821. Attention: Investor Relations. Telephone
714-671-6800.
CONTACT: PacWest Bancorp
Matt Wagner
Chief Executive Officer
(310) 728-1020
Vic Santoro
Executive Vice President and CFO
(310) 728-1021
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