Irving Bank Corp., in a surprise move, announced today that it will recommend that its board of directors accept a revised $1.5-billion takeover bid by longtime suitor Bank of New York Co.
A merger would nearly double Bank of New York’s size, vaulting it close to the top 10 of the nation’s largest banking companies. The two banks had a combined $47.8 billion in assets as of June 30.
Under the bid, Bank of New York would pay $15 in cash and 1.675 shares of its own stock for each of Irving’s 18.9 million common shares outstanding, plus a warrant valued at $5 toward the purchase of Bank of New York stock, Irving spokesman D. Emerson Phelps said.
He said the entire deal was valued at $78.42 a share, or around $1.48 billion, more than $200 million higher than the previous hostile offer. That offer had the same amount of cash but had slightly less stock and did not include the warrants.
Phelps said he could not comment immediately on the chain of events that led to Irving’s unexpected reversal, except to remark, “It looks like it’s over now.”
A special Irving board meeting was scheduled for Friday for a vote on the offer.
The surprise announcement came one day after Bank of New York won another legal battle in its yearlong bid to acquire Irving, with an appeals court striking down a key provision of Irving’s “poison pill” anti-takeover defense.
The defense would have allowed all Irving shareholders--except a hostile suitor--to buy $400 worth of Irving shares for $200 if any suitor bought more than 20% of Irving stock without the support of Irving’s management. Such devices are intended to make unsolicited takeover bids prohibitively expensive.