First Union Corp. said Thursday that it amended its merger agreement with Everen Capital Corp. to reflect recent volatility in its stock price.
Instead of the initial agreement to issue a fixed number of shares, First Union would now have room to issue more shares at the deal's closing depending on the stock's performance, a bank spokeswoman said. The stock swap deal was announced in April and is expected to close in the third quarter. The transaction would still be valued at the original price of $1.1 billion, the spokeswoman said.
When the deal was announced First Union was trading at $55. It closed Thursday at $44.875 after a warning from the bank this week that earnings would fall at least 14% below a previously revised estimate of $4 a share.
"We're committed to making this a fair transaction for them," the First Union spokeswoman said. "This was the right thing to do."