Hampton Roads Bankshares in Virginia Beach juggled a search for a new chief executive while also arranging for its eventual merger with Xenith Bankshares in Richmond, Va.
The $2.1 billion-asset Hampton Roads started talking to the $1 billion-asset Xenith about a combination shortly after
At the same time, Hampton Roads was in the early stages of a CEO search that its board expected to last four to six months. The board decided on several occasions to keep looking for a successor for Glenn – Charles Johnson, the company's chairman, was interim CEO – as it negotiated with Xenith. The search was finally suspended in mid-January, less than a month before the companies
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The $2 billion-asset Hampton Roads said in a press release Wednesday that it will pay $107.2 million in stock for the $1 billion-asset Xenith.
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Mergers of equals are hard to complete due to cultural issues, but a spike in consolidation paired with weary leaders and a lack of young talent could make such combinations more appealing.
March 2 -
Cordia Bancorp found an experienced leader to run its bank, and executive recruiters believe more companies could do the same as they try to train the next generation. One problem: Most retired CEOs seem content to sit on the sidelines after enduring the financial crisis.
August 7
The merger is unique because, while Hampton Roads is technically the acquirer, Xenith will
The filing discloses that Hampton Roads had already considered a merger – hiring Sandler O'Neill as its financial adviser in early May to evaluate strategic alternatives – though there were no disclosures about talks with interested parties. In addition, Xenith's board in prior years had evaluated Hampton Roads as a possible merger partner.
Overall, the filing indicates a rather seamless negotiation between Xenith and Hampton Roads that began when Layfield contacted Johnson in October before resulting in a deal announcement on Feb. 10.
There was some back and forth over the exchange rate. Hampton Roads originally proposed 3.8 shares of its stock for each Xenith share; Layfield at Xenith said he was unwilling to take that ratio to his board. The companies finally settled on 4.4 shares of Hampton Roads stock for the exchange.
