Fifth Third buying First Charter |
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Published
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Thu, 16 Aug 2007 13:18
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CINCINNATI (AP) - Financial services company Fifth Third Bancorp said Thursday it will buy First Charter Corp. for about $1.09 billion in cash and stock in a move to enter the North Carolina and Atlanta markets.The buyout of Charlotte-based First Charter will give Fifth Third Bancorp 57 branches in North Carolina and 2 in suburban Atlanta. The company will pay $31 per share in the form of 70 percent common stock and 30 percent cash.The purchase price represents a 53 percent premium to First Charter's closing price of $20.25 on Wednesday.Fifth Third said the deal will add about $4.9 billion in assets and $3.2 billion in deposits to the company. In the Charlotte area, it now will have $2.2 billion in deposits. In all, Fifth Third will operate 57 retail locations and 134 ATM's in North Carolina, and 5 retail locations and 6 ATM's in Georgia.'First Charter expands our presence in the Southeast, where we have focused recent acquisition and de novo efforts,' said Kevin Kabat, president and CEO of Fifth Third. 'Given that First Charter represents a new market for Fifth Third, we do not expect consolidation activity.'First Charter President and CEO Bob James will join Fifth Third as president of the Charlotte affiliate.The deal is expected to close during the first quarter of 2008, and is forecast to dilute 2008 earnings per share by about 2 percent but be neutral to 2009 earnings per share. Fifth Third said the acquisition will generate about $22 million in cost reductions phased in over two years, and will require charges of up to $39 million related to staff training, retention and severance, as well as systems integration.Shares of Fifth Third closed at $51.65 Wednesday.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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