A Connecticut thrift holding company is embarking on its fifth acquisition in five years in a deal that would enlarge its market share by 40% in its home county.
The planned acquisition of Midconn Bank by Eagle Financial Corp. stirs up the relatively stable banking scene in the Hartford area. The purchase would move Eagle from fifth to fourth place in market share in Hartford County, with about 5.2% of deposits. Eagle would also move into Middlesex County for the first time.
"From that standpoint, it's a significant move for us," said Robert J. Britton, president and chief executive officer of Eagle Financial. "It puts us in a stronger position."
The stock transaction, valued at $49.1 million, is expected to close in May. Midconn stockholders would get 0.86 share of Eagle Financial stock for each share they own-about 1.8 times Midconn's book value. The agreement would also give Eagle Financial an option to buy up to 19.9% of outstanding shares of Midconn common stock.
Eagle Financial officials said they expect expense savings of 30% to 40% after the merger, so earnings would increase in the first year. But Mr. Britton refused to discuss whether there would be layoffs or branch closings. The only town where branches overlap is Rocky Hill in Hartford County.
Eagle has 24 branches, including 19 in Hartford County, while Midconn has 10 branches.
"The deal seems to me to make sense for Eagle," said Ken Puglisi, principal at Sandler O'Neill & Partners in New York. "If they get out the kind of cost savings they talked about, it shouldn't affect their earnings per share."
And Mr. Puglisi said the thrift's size increase would be a plus. "Perhaps it makes them a bit more attractive because they've got more mass," he said.
But the thrift plans to stay independent.
Eagle Financial adopted a shareholder rights plan in October to stave off "unfair takeover tactics." Under the plan, stockholders get one right per share of common stock held as of Nov. 1, 1996. The rights are triggered if a person or group takes at least a 15% stake in Eagle stock.
In fact, Eagle Financial has its own takeover plans.
Mr. Britton said the company hopes that other deals will occur. "We're always talking to people," he said.