Within days of publicly declaring their plans to buy a Miami-based banking company, officials with Barnett Banks Inc. said the deal is dead.
Barnett officials would not say why the discussions with $1.5 billion- asset Republic Banking Corp. were terminated; due diligence had already begun. But analysts speculated the cause may have been cultural differences between Republic's management team and executives at Jacksonville, Fla.- based Barnett.
The two companies announced an agreement in principle May 15, amid intense market speculation and media inquiries. But last week Barnett issued a short statement declaring that it and Republic "could not agree on certain issues and have mutually decided not to proceed with the proposed transaction."
Barnett, which has $41 billion of assets, is focusing its retail banking strategy on new growth in Florida, and the proposed deal was supposed to strengthen its business development efforts in the heavily Hispanic South Florida market. Thirty-two-year-old Republic was run for many years by a well-known Cuban-American businessman, Luis Botifoll, and its current chairman, Oscar Bustillo Jr., has continued to forge ties to the Hispanic market.
The deal would have pushed Barnett ahead of NationsBank Corp. in deposit market share in South Florida; First Union Corp. would have remained No. 1 in the market. Republic's lead bank has 25 branches and $1.3 billion of deposits.
R. Harold Schroeder, an analyst with Keefe, Bruyette & Woods, said he was disappointed that the deal fell through. "This was an opportunity to get two good companies together," he said. "Republic had a nice mix of both local and international business. Whatever the differences may be, hopefully they will work them out."