Just another Friday night in Florida…
There’s nothing like a Friday night for some good SEC filings and this S-4 filed late Friday by Colonial Bancgroup (CNB) took me back to my roots along the charming I-4 corridor in Florida.
First: a bit of background. Colonial announced in July that it was acquiring Citrus & Chemical, a 10-branch bank based in Lakeland, Fl. for around $219 million, or $39 a share. Because C&C was not public, it’s hard to know whether that’s a decent premium. C&C’s brush with fame was that it was started by the father of former Rep. Katherine Harris. Harris’ father, George Harris Jr. died in January 2006 while playing tennis and it was widely believed — at least in that part of Florida — that the bank wouldn’t be sold while he was alive.
That’s where the S-4 picks up, noting that in late April, C&C’s board met to discuss their options with Hovde, but chose to remain independent. No doubt, it would have looked bad given that there was probably not enough time for grass to grow near Harris’ grave. But a year later, in the spring of 2007, the folks at Hovde came calling again, and this time, C&C’s board was a bit more interested. As the S-4 notes, Hovde contacted 26 different banks and 17 expressed enough interest in C&C to sign confidentiality agreements and take a closer look. Of those, five were very interested, though only three gave Hovde written offers. Two of those offers were for a 50-50 cash and stock deal — like the type that was finally approved — and one was for all stock.
What’s the take-away here? That despite the background of over-zealous subprime lending in Florida, there’s still plenty of interest in some of the smaller banks in that area.