Capital One to Acquire North Fork for $14.6 Billion in Stock and Cash
13 März 2006 - 5:05AM
PR Newswire (US)
Transaction Will Place Capital One Among the Top-10 Banks in U.S.
MCLEAN, Va. and MELVILLE, N.Y., March 12 /PRNewswire-FirstCall/ --
Capital One Financial Corporation (NYSE:COF) and North Fork
Bancorporation, Inc (NYSE:NFB) today announced a definitive
agreement under which Capital One will acquire North Fork in a
stock and cash transaction valued at approximately $14.6 billion.
The combined company will be one of the 10 largest banks in the
United States, based on deposits and managed loans, and the
third-largest retail depository institution in the New York region,
the nation's largest deposit market. Under the agreement, North
Fork shareholders will receive cash or stock valued as of Friday,
March 10, 2006 at $31.18 per North Fork share, which represents a
22.8 percent premium over the closing price of North Fork shares.
Capital One expects minimal disruption for North Fork's employees,
customers, and communities since the companies have no
geographically overlapping banking operations. "North Fork is a
great strategic fit with Capital One and brings balance and
diversification to our company," said Richard D. Fairbank, Chairman
and Chief Executive Officer of Capital One. "We're continuing to
combine the power of national lending and local banking. North Fork
provides us with a proven franchise and a strong growth platform in
the largest banking market in America. Our highest priority will be
the successful integration of North Fork and the continued growth
of our banking businesses in New York, New Jersey, Connecticut,
Louisiana, and Texas." Capital One, a financial holding company, is
one of the nation's leading diversified financial services
companies and through its subsidiary, Hibernia National Bank,
operates more than 300 branches in Louisiana and Texas. North Fork,
a bank holding company with operations in the greater New York
region, provides a full range of financial products and services to
its retail and commercial customers, including deposit products and
consumer, business and mortgage loans, along with other services.
With approximately $36.6 billion in deposits, as of December 31,
2005, and 355 branch locations throughout New York, New Jersey and
Connecticut, North Fork is the third-largest depository institution
in the greater New York region. The combined company will have
deposits of more than $84 billion, a managed loan portfolio of more
than $143 billion, more than 50 million customer accounts, and 655
branches. Fairbank said, "Small business is at the intersection of
national lending and local banking. Capital One is already one of
the nation's leaders in small business lending, and North Fork has
a strong and growing small business franchise. With this
transaction, we can accelerate growth in this attractive and
profitable market and bring a full spectrum of banking services to
small business customers through multiple channels." The
transaction is expected to close in the fourth quarter of 2006.
North Fork Chairman, President and Chief Executive Officer, John A.
Kanas will become the President of Capital One's banking business,
reporting directly to Capital One's Chairman and Chief Executive
Officer, Richard D. Fairbank, and will join Capital One's Board of
Directors. Herb Boydstun, President of Capital One's existing
banking subsidiary, will report to Kanas and will continue to lead
Capital One's banking business in Louisiana and Texas. "I am
especially pleased to welcome John Kanas, his outstanding
management team, and North Fork's talented employees to Capital
One. Under John's leadership over the last 35 years, North Fork has
become one of America's premier banks. John's business acumen and
operational excellence are legendary in banking. He will be a
welcome addition to our senior management team and our Board. North
Fork is known for its commitment to its customers, employees and
communities and, working with John and his team, we expect to build
on this legacy." Fairbank added, "We remain committed to our
banking strategy in Louisiana and Texas. Our integration of
Hibernia continues to progress smoothly. We have a leading position
in Louisiana and we're accelerating Hibernia's successful de novo
growth strategy in the fastest growing markets in Texas. Under
Herb's leadership, we'll continue to focus on building a winning
banking business in those markets." Kanas said, "I share Rich's
vision for bringing together the best of Capital One and North
Fork. Capital One already has over three million customer accounts
in our footprint. Together, we can create great value for our
shareholders and customers by combining Capital One's financial
strength, national brand, massive customer base, leading financial
products and marketing capabilities, with our strong
business-oriented banking franchise. I'm incredibly proud of
everything that we created as an independent company and I am
committed to building the next generation of North Fork as part of
Capital One." Under the terms of the definitive agreement, which
has been approved by both companies' boards of directors, North
Fork shareholders will have the right, subject to proration, to
elect to receive cash or Capital One common stock, in either case
having a value equal to $11.25 plus the value at closing of .2216
Capital One shares. Based on the price of Capital One shares at the
close of business on Friday, March 10, 2006, the transaction is
valued at $31.18 per North Fork share. The actual value on
consummation of the acquisition will depend on Capital One's share
price at that time. The total transaction value of approximately
$14.6 billion includes $5.2 billion in cash. This cash
consideration will be financed through a combination of internal
resources and market financings, potentially including a hybrid
capital security. The transaction is subject to shareholder
approval from both companies in addition to regulatory approval.
The transaction is expected to close in the fourth quarter of 2006.
Additionally, Capital One said it expects to repurchase
approximately $3 billion of its shares of common stock in the open
market following the consummation of the transaction. The company
expects approximately half of such repurchase program would occur
during the last six months of 2007 and half during the first six
months of 2008. The timing and nature of these repurchases will
depend on market conditions and applicable securities laws. Capital
One expects to maintain its current dividend policy subject to
review by its Board of Directors. Capital One expects the
transaction to achieve cost savings and other synergies of $275
million, pretax, fully phased in by 2008, and to be mildly
accretive beginning in 2008. Capital One affirmed its earnings per
share guidance for 2006 to be between $7.40 and $7.80 per share
(fully diluted), excluding the impact of this transaction. J.P.
Morgan Securities, Inc and Citigroup Corporate and Investment
Banking acted as financial advisers to Capital One and Cleary
Gottlieb Steen & Hamilton LLP acted as its legal counsel.
Sandler O'Neill, LP and Keefe, Bruyette & Woods, Inc. acted as
financial advisers to North Fork and Wachtell, Lipton, Rosen &
Katz acted as its legal counsel. Forward-Looking Statements
Information set forth in this release contains forward-looking
statements, which involve a number of risks and uncertainties.
Capital One and North Fork caution readers that any forward-looking
information is not a guarantee of future performance and that
actual results could differ materially from those contained in the
forward-looking information. Such forward-looking statements
include, but are not limited to, statements about the benefits of
the business combination transaction involving Capital One and
North Fork, including future financial and operating results, the
new company's plans, objectives, expectations and intentions and
other statements that are not historical facts. The following
factors, among others, could cause actual results to differ from
those set forth in the forward-looking statements: the ability to
obtain regulatory approvals of the transaction on the proposed
terms and schedule; the failure of Capital One or North Fork
stockholders to approve the transaction; the risk that the
businesses will not be integrated successfully; the risk that the
cost savings and any other synergies from the transaction may not
be fully realized or may take longer to realize than expected;
disruption from the transaction making it more difficult to
maintain relationships with customers, employees or suppliers;
competition and its effect on pricing, spending, third-party
relationships and revenues. Additional factors that may affect
future results are contained in Capital One's and North Fork's
filings with the SEC, which are available at the SEC's web site
http://www.sec.gov/. Capital One and North Fork disclaim any
obligation to update and revise statements contained in these
materials based on new information or otherwise. Additional
Information About this Transaction In connection with the proposed
merger, Capital One will file with the Securities and Exchange
Commission (the "SEC") a Registration Statement on Form S-4 that
will include a joint proxy statement of Capital One and North Fork
that also constitutes a prospectus of Capital One. Capital One and
North Fork will mail the joint proxy statement/prospectus to their
respective stockholders. Investors and security holders are urged
to read the joint proxy statement/prospectus regarding the proposed
merger when it becomes available because it will contain important
information. You may obtain a free copy of the joint proxy
statement/prospectus (when available) and other related documents
filed by Capital One and North Fork with the SEC at the SEC's
website at http://www.sec.gov/. The joint proxy
statement/prospectus (when it is available) and the other documents
may also be obtained for free by accessing Capital One's website at
http://www.capitalone.com/ under the heading "Investors" and then
under the heading "SEC & Regulatory Filings" or by accessing
North Fork's website at http://www.northforkbank.com/ under the tab
"Investor Relations" and then under the heading "SEC Filings." This
release does not constitute an offer of securities for sale.
Participants in this Transaction Capital One, North Fork and their
respective directors, executive officers and certain other members
of management and employees may be soliciting proxies from
stockholders in favor of the merger. Information regarding the
persons who may, under the rules of the SEC, be considered
participants in the solicitation of the stockholders in connection
with the proposed merger will be set forth in the joint proxy
statement/prospectus when it is filed with the SEC. You can find
information about Capital One's executive officers and directors in
Capital One's definitive proxy statement filed with the SEC on
March 21, 2005. You can find information about North Fork's
executive officers and directors in their definitive proxy
statement filed with the SEC on March 30, 2005. You can obtain free
copies of these documents from the Capital One or North Fork using
the contact information above. Capital One Hosts Analyst Conference
Call Capital One's webcast of the analyst conference call is
scheduled for Monday, 13 March at 8:30 am EST. The webcast will be
accessible on the company's home page (http://www.capitalone.com/).
Choose "Investors" on the bottom left corner of the home page to
access the webcast and view and download the press release, slides,
and other financial information. About Capital One Headquartered in
McLean, Virginia, Capital One Financial Corporation
(http://www.capitalone.com/) is a financial holding company whose
principal subsidiaries, Capital One Bank, Capital One, F.S.B.,
Capital One Auto Finance, Inc., and Hibernia National Bank
(http://www.hibernia.com/), offer a broad spectrum of financial
products and services to consumers, small businesses and commercial
clients. Capital One's subsidiaries collectively had $47.9 billion
in deposits and $105.5 billion in managed loans outstanding as of
December 31, 2005. Capital One, a Fortune 500 company, trades on
the New York Stock Exchange under the symbol "COF" and is included
in the S&P 500 index. About North Fork North Fork is a regional
bank holding company headquartered in New York with approximately
$58 billion in assets conducting commercial and retail banking from
branch locations in the Tri-State area with a complementary
national mortgage banking business. DATASOURCE: Capital One
Financial Corporation CONTACT: Capital One, Investors, Mike Rowen,
+1-703-720-2455, or Media, Tatiana Stead, +1-703-720-2352, or Julie
Rakes, +1-804-284-5800; or North Fork Investors, Daniel M. Healy,
+1-631-531-2058 Web site: http://www.capitalone.com/
http://www.northforkbank.com/
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