When FirstMerit Corp struck a $912 million stock deal to purchase Citizens Republic Bancorp last September, it offered unusually generous terms to secure $250 million in subordinated debt financing that was critical to the acquisition.FirstMerit needed the funds to repay the U.S. government for bailing out Citizens in 2008, so the Akron, Ohio-based financial services company promised bond investors that it would buy back their subordinated debt at $1.01 for every dollar if the acquisition received no regulatory approval within nine months."While we fully expect regulatory approval, this was our way of mitigating the risks of not getting approval and being left with the capital," said Jerry Wiant, co-head of the financial services group at RBC Capital Markets, which advised FirstMerit. Wiant said it was the first time he had seen a U.S. bank use this kind of financing clause.With regulators placing the financial industry under the microscope in the wake of the financial crisis, firms have to become more creative to seal deals, according to bankers and lawyers who specialize in mergers and acquisitions for banks, insurers and other financial service providers.
Citizens Republic Bancorp, Inc. is a diversified banking and financial services company that is registered as a bank holding company. Shares of CRBC fell by 0.49% or $-0.1/share to $20.37. In the past year, the shares have traded as low as $13.40 and as high as $20.98. On average, 256295 shares of CRBC exchange hands on a given day and today's volume is recorded at 88244.
Republic Bancorp, Inc. (Republic) is a holding company. Shares of RBCAA fell by 0.9% or $-0.2/share to $22.11. In the past year, the shares have traded as low as $19.56 and as high as $27.90. On average, 44731 shares of RBCAA exchange hands on a given day and today's volume is recorded at 13600.
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