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SP Acquisition Holdings Inc., a blank check company with $429 million to spend, has agreed to buy the $4 billion-asset Frontier through a share exchange and then recapitalize its bank.
July 31
Frontier Financial Corp. and SP Acquisition Holdings Inc. terminated their July merger deal after failing to obtain regulatory approvals in time to complete the deal by a Saturday deadline.
SP Acquisition, a blank shell company formed in 2007, will cease to exist on Oct. 10 as a result of the deal falling through. Such entities have a set time after going public, generally two years, to use the assets from an initial public offering or return the money to shareholders.
Frontier Financial, a regional financial holding company based in Washington state with some $4 billion of assets, has been participating in parts of the Federal Deposit Insurance Corp.'s voluntary Temporary Liquidity Guarantee Program, in addition to the FDIC's general deposit insurance program. The FDIC in August extended coverage under the temporary liquidity program by six months until June 30, 2010.
Frontier Chairman and Chief Executive Pat Fahey said Monday that, "We will continue to aggressively work to resolve our loan problems, and shore up our capital position."
In September, Frontier Financial said it expected to post added provisions for loan losses of $140 million and loan charge-offs, or loans it doesn't expect to be able to collect that aren't in default yet, of $100 million for its third quarter.
Frontier holders were due to get about 2.5 million SP shares worth about $24 million and another 2.5 million warrants. Its shares closed at 95 cents on Friday and didn't trade premarket. The stock is down nearly 80% this year. SP shares finished at $9.63.
