The move to take Starkville-based Cadence Bank private is one step closer to reality as the Federal Reserve will allow the institution’s sale to a Texas-based investment firm.
Officials with Cadence Financial Corp. – Cadence’s parent company – announced the Fed’s decision in a statement issued Tuesday afternoon.
The acquisition is expected to take place on or about March 1.
The deal would ultimately make Cadence a wholly-owned subsidiary of Community Bancorp and give CBC its first acquisition.
CBC was founded to “acquire, stabilize and operate failed or distressed U.S. banks,” company officials said.
The agreement calls for Cadence shareholders to obtain $2.50 per common share, according to the statement. “Cadence will be the surviving corporation in the merger transaction, with its identity, character and personnel” intact, the statement reads.
Registrar and Transfer Co. will be the paying agent, according to the statement. The company will mail all those who hold Cadence stock certificates information about surrendering these documents for the cash payments. Those holding stock in brokerage accounts will receive proceeds following closure, according to the statement.
The majority of CBC’s investors include endowments, foundations and public and private pension funds.
Cadence is a $1.6 billion financial services company with operations in Tennessee, Alabama, Florida, Georgia and Mississippi. In November, CBC obtained $1 billion in capital to invest in banking institutions.
A majority – 89 percent – of Cadence’s shareholders voted to support the transaction. The deal also includes provisions for CBC to pay around $38 million for the U.S. Treasury’s ownership of $44 million in preferred stock in the banking institution.
Cadence agreed to take part in the Troubled Asset Relief Program in January 2009.
The deal with CBC became a reality in October 2010 when Cadence officials decided to withdraw from a previous merger agreement with in-state banking entity Trustmark.
In reply to a request for comment on the Fed approval, a Cadence official sent an e-mail Tuesday indicating a press conference is scheduled for March 2.
CBC President and CEO Paul B. Murphy Jr. could not be reached for comment by press time Tuesday.
Cadence’s stock closed at $2.48 a share Tuesday, unchanged from the previous day’s trading.