PacWest deal for El Dorado collapses
PacWest Bancorp's agreement to buy El Dorado Savings Bank in Placerville, Calif., has fallen through.
The $2.2 billion-asset El Dorado did not receive the two-thirds vote at a special shareholder meeting that it needed to be sold, the $25 billion-asset PacWest said in a Wednesday press release.
Recent declines in bank stock prices are at least partially to blame, Tom Meuser, El Dorado’s chairman, said in the release.
"The El Dorado board and I are disappointed that the unexpected recent decline in bank stocks — which significantly reduced the nominal value of the proposed stock-and-cash transaction — has affected shareholder support at this time,” Meuser said. “El Dorado’s board and management team will work together to map an independent path forward."
Neither PacWest nor El Dorado owes the other a termination payment under their agreement.
When the deal was announced on Sept. 12, it was expected to be 1% accretive to PacWest’s 2019 and 2020 earnings per share. The deal was valued at about $466.7 million.
“We offer our best wishes to El Dorado and its management,” said Matt Wagner, president and CEO of PacWest, which is based in Beverly Hills. “We will continue to execute our business plan and work to produce top-tier operating results, and we intend to continue our M&A strategy, which prioritizes being a financially disciplined acquirer.”
PacWest's bid for El Dorado was not the highest, according to a prospectus filed last year. El Dorado said it chose the offer because of PacWest's expertise in closing deals quickly and in integrating acquisitions.
El Dorado had cited shareholder returns, rising interest rates and competitive threats as the reasons it sought a sale.