Bank Extends Deadline for Stock Swap

Predicting success and insisting that its preferred stock swap offer is going smoothly, Southwest Bancorp has extended the offer’s deadline from Jan. 4 to Feb. 1.

Southwest officials believe the “timing of the issue” during the holidays did not allow shareholders enough time to follow through, according to executive vice president Frank J. Mercardante.

Bank officials said that about one-third of Southwest’s 303 preferred shareholders have already tendered their shares, with an expected acceptance rate of about two-thirds.

The exchange offer calls for the bank to give seven shares of common for each of its 200,000 preferred shares.

Holders of Southwest preferred are each owed $5 per share in back dividends, or a total of $1 million. Although the dividends will continue to accumulate in arrears, the only way that shareholders would receive the dividends is if the company were ever to liquidate its assets.

The group of preferred shareholders who choose not to accept the offer will be offered two seats on the board of directors at Southwest’s annual meeting in March.

Southwest’s common stock closed Monday at $2.50 bid, meaning that the seven-for-one exchange offer is worth $17.50 per preferred share.

However, the shares were sold during a 1979 offering for $25 per share. So, with the $5 per share in back dividends, there have been reports of hesitancy by some preferred shareholders to accept the offer.

If all of the preferred shares were to be tendered, Southwest then would have 4.5 million shares of common, or about double the number of shares outstanding as of Sept. 30, in which case the book value of each common share would climb from $3.42 to $3.56.