Hanmi bank withdraws bid for rival Koreatown lender
Koreatown bank Hanmi Financial has dropped its bid to acquire larger rival BBCN Bancorp, easing the way for the mega-merger between BBCN and another Koreatown lender, Wilshire Bancorp.
Hanmi executives on Thursday morning released a statement saying, “We have concluded that, at this time, continued pursuit of a combination with BBCN is not in the best interests of our stockholders.”
The decision clears one hurdle along BBCN’s path to acquire Wilshire, a deal that would create by nation’s biggest Korean American bank. BBCN already is the largest Korean American bank by assets. Wilshire ranks second, and Hanmi is a close third. All are headquartered in Los Angeles’ Koreatown.
Still, the BBCN-Wilshire deal must be approved by regulators and by the shareholders of both banks. And BBCN Chief Executive Kevin Kim has acknowledged that the decision to acquire Wilshire was not unanimous among his board members. Even without Hanmi’s offer, there could be a campaign to persuade BBCN shareholders to reject the Wilshire deal.
BBCN and Wilshire announced their plan to combine on Dec. 7, unveiling a deal that calls for BBCN to buy Wilshire for about $1 billion in stock.
The announcement came two weeks after Hanmi made an unsolicited offer to acquire BBCN for about $1.6 billion in stock, a proposal that was aimed at preempting or disrupting the BBCN-Wilshire deal.
A combination of any two of the three big Koreatown banks would create a new leading player in the industry, and none of the three wanted to be left out of a deal, said Tim Coffey, an analyst at banking industry brokerage FIG Partners.
If BBCN and Wilshire successfully combine, the resulting entity will be nearly three times larger than Hanmi, putting the smaller bank at a disadvantage. Still, Coffey said there may be some near-term potential for Hanmi to pick off customers from BBCN and Wilshire as they prepare to merge.
He noted that it is rare for banks to keep all of their customers after a merger or acquisition, and that for clients who plan to leave BBCN or Wilshire, “Hanmi would be the logical choice.”
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