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The companies said in a press release Monday that "irreconcilable differences of opinion regarding a number of matters" had developed and, as such, the boards had decided to terminate their agreement.
November 28
Five months after terminating its planned merger with one suburban Washington, D.C., bank, Alliance Bancshares (ABVA) in Chantilly, Va., has struck a deal to team up with another.
WashingtonFirst Bankshares in Reston, Va., announced late Thursday that it is buying the $506 million-asset Alliance for $24.4 million in cash and stock.
In connection with the deal, the $608 million-asset WashingtonFirst said it has received commitments to raise $20 million of equity capital from institutional investors, existing board members and local investors. WashingtonFirst also said that once the deal is completed in the fourth quarter it intends to list its shares — which now trade over the counter — on the Nasdaq.
The deal would be WashingtonFirst's fourth, and largest, since it was founded in 2004. It would boost its assets to over $1 billion and add six branches to its 10 offices in Virginia, Maryland and the District of Columbia.
"We are thrilled to be able to add Alliance's valuable northern Virginia franchise to our growing footprint in the Washington metropolitan region," Shaza Andersen, WashingtonFirst's chief executive, said in a news release.
Alliance announced last summer that it would
The big difference between the two deals is price; WashingtonFirst is paying roughly $7 million less for Alliance than what Eagle had agreed to pay.
The steep drop in price is a reflection of Alliance's recent struggles.
The company lost $6 million last year, compared to a profit of $705,000, as revenues declined and credit quality weakened.
WashingtonFirst said it Alliance's shareholders can elect to receive a fraction of WashingtonFirst stock for each share owned or $5.30 in cash, provided that no more than 20% of shares are exchanged for cash. The aggregate price works out to a 19% premium over Alliance's closing price Thursday and about 86% of Alliance's book value at Dec. 31.
Alliance's shares were up 9% in heavy trading midday Friday, to $4.45.
In a news release, Alliance Chairman Don Fisher called WashingtonFirst "an excellent partner."
"They have a proven record of growth, profitability, and the ability to execute mergers and acquisitions, and we are confident that this merger will serve our shareholders, customers, and employees very well."
Fisher and two other Alliance directors are expected to join WashingtonFirst's board when the deal is completed.
