Ozaukee Bank in Cedarburg, Wis., disclosed Wednesday that it had turned down a higher offer this summer before accepting a buyout bid from Bank of Montreal.
On July 10, the $694 million-asset company said it would sell itself to the Bank of Montreal's Chicago subsidiary Harris Bank for $190 million in stock. But another bidder, which Ozaukee did not identify in its regulatory filing Wednesday, had offered $198 million in stock and cash.
The $336.8 billion-asset Bank of Montreal sweetened its offer by agreeing to pay $2.3 million of the target's transaction costs. Though the total remained below the competing offer, Ozaukee said Bank of Montreal provided "superior long-term value."
The company cited Bank of Montreal's size and geographic scope, its "impressive return on equity," and Ozaukee's suspicion that the stock of the other candidate was overvalued.
The Wisconsin bank decided to feel out buyers in February when it realized that its future as an independent company was limited. It hired Hovde Financial Inc., which identified six potential buyers, four of which submitted proposals.
