Bancorp Hawaii Will Acquire Encino-Based CU Bancorp
Bancorp Hawaii Inc. will buy Encino-based CU Bancorp for $183 million in stock and cash, the companies said.
Bancorp Hawaii agreed to pay $15.34 in stock and cash for each CU Bancorp share, a premium above CU’s closing price of $14.375 on Tuesday.
CU Bancorp shares rose as much as 1 3/8 to 14 5/8 in morning trading Tuesday, while Bancorp Hawaii shares rose 3/8 to 45 3/8.
Bancorp Hawaii, based in Honolulu, operates the Bank of Hawaii and provides financial services in more than 160 locations in Hawaii, the Asia-Pacific region and the U.S. mainland.
CU Bancorp, operating as California United Bank, has 21 branches in Southern California. It bought Signal Hill-based Home Interstate Bancorp last August.
“Bancorp Hawaii is pursuing a strategy of geographical diversification spanning the Asia-Pacific region and aimed at capturing trade flows across the Pacific,” the company’s chief executive, Lawrence Johnson, said in a news release. “The acquisition of California United Bank is an important element of this overall strategy. It enhances our already-strong franchise in the Pacific and helps to further diversify our portfolio.”
California United Bank has assets of approximately $844 million, a strong balance sheet, and a capital base well in excess of all regulatory agency requirements.
The transaction will be structured as a merger of CU Bancorp into Bancorp Hawaii, and is intended to be tax-free to CU Bancorp shareholders with respect to Bancorp Hawaii stock received. The merger, which will be accounted for as a purchase transaction, will convert all CU Bancorp stock into rights to receive $15.34 per share in cash and/or Bancorp stock. At least 60% and not more than 80% of CU Bancorp’s stock will be subject to stock-for-stock conversion.
The total merger consideration will be approximately $183 million. CU Bancorp has issued a stock option to Bancorp Hawaii that, following certain events, would permit Bancorp to purchase shares equal to 19.9% of CU Bancorp’s outstanding stock at a price of $13.00 per share.
The transaction is expected to close before the end of the third quarter of 1997, subject to approval by CU Bancorp shareholders and federal and state regulators. The transaction is expected to add to earnings in the first full calendar year of 1998.
Bancorp Hawaii, Inc. is a regional bank holding company with more than 160 locations spanning nearly 12,000 miles from Singapore to New York.
Bancorp and its subsidiaries provide varied financial services to businesses, governments and individuals in Hawaii, the Asia-Pacific region and in selected markets on the U.S. Mainland.
Bancorp Hawaii is the largest Hawaii-based financial organization, and its principal subsidiary, Bank of Hawaii, is the state’s largest commercial bank.
