Lloyd Cash thought he had a deal. He was wrong.
Mr. Cash, president of $62 million-asset Bank of Bolivar, Tenn., said he had made the highest bid to buy neighboring Bank of Middleton, Tenn. But at the last minute, his bank lost out to Union Planters Corp., Memphis.
Bank of Middleton had been seeking a buyer because its chairman, James S. Simpson, is retiring.
"We don't consider it ethical," Mr. Cash said. "But it's legal."
An attorney for Bank of Middleton, however, said Union Planters was chosen because it offered the best bid.
Bank of Middleton invited bids from both Bank of Bolivar and Union Planters, among others, said Robert Walker, a lawyer at Baker, Donaldson, Bearman and Caldwell, Memphis.
Union Planters was selected because its offer was "clearly the highest and the best," he said. The $39 million-asset bank currently has a letter of intent to be acquired by Union Planters, but the agreement has not been completed nor made public, Mr. Walker said.
Elizabeth Malone, spokeswoman for Union Planters, said the $15 billion- asset bank holding company does not comment on pending acquisitions.
Union Planters has been an active buyer lately, though most of its deals have been for banks larger than Middleton's. Since May, it has announced plans to acquire $1.3 billion-asset Magna Bancorp, Hattiesburg, Miss.; $305 million-asset Sho-Me Financial Corp., Mount Vernon, Mo.; and $1.9 billion- asset Capital Bancorp, Miami.
Mr. Cash said Union Planters is only interested in Bank of Middleton to make itself a more attractive acquisition target. Middleton, a town of fewer than 600 people, has only one other banking office, a branch of First South Bank, another Bolivar-based institution. Hunter Simmons, president of First South Bank, said he did not bid for Bank of Middleton.
But Hope Willard, an analyst at J.C. Bradford & Co., Nashville, said she doubts a presence in Middleton would make Union Planters more attractive to a buyer.
"I don't know if that presence would be a competitive advantage," Ms. Willard said. Large acquirers have tended to be more interested in urban market share in recent deals, she added.
In fact, Ms. Willard said, a Union Planters deal for Bank of Middleton would not be uncharacteristic. "It is clearly in line with the company profile to acquire community banks," she said.