DURHAM – Triad Business Bank has identified itself as the rival bidder for M&F Bancorp and disclosed a fourth, nonbinding proposal that would provide a fixed $53.50 cash election for up to 25% of shares or 1.25 shares in a combined company ahead of an Oct. 20 shareholder vote.
The Greensboro-based bank said it delivered the proposal Oct. 8, one day after M&F shareholders did not approve the pending Optus Bank transaction at an Oct. 7 meeting. That meeting was adjourned and is scheduled to reconvene Oct. 20.
Triad describes Proposal Four as a nonbinding indication of interest. Any transaction would require a definitive agreement, approval by shareholders of both banks, approval by the FDIC, the North Carolina Commissioner of Banks and the Federal Reserve Board, and other customary conditions.
Under Triad’s fourth proposal, M&F shareholders could elect $53.50 in cash at closing, subject to a 25% aggregate cap and proration if cash elections exceed the limit. The alternative would provide 1.25 shares of the combined company for each M&F share.
Triad said M&F Bancorp would remain the surviving holding company and would own both Mechanics and Farmers Bank and Triad Business Bank. Its proposal calls for M&F Bank to retain its name, 1907 charter, Durham home office and minority-depository-institution status. Triad also said the holding company’s governing documents would require a majority-Black board.
M&F’s board determined Oct. 14 that the Triad proposal was not superior to the pending Optus transaction and was not reasonably likely to lead to a superior proposal, according to Triad and independent banking-industry reporting. The Optus agreement remains the board-backed transaction.
The Optus deal, announced in July at approximately $105 million, would provide an estimated $46.57 per M&F share at closing plus a contingent payment of up to $6.73 if a preferred-stock redemption is completed within the specified period. M&F Bank would merge into Optus Bank and the M&F name would end under that agreement.
Axios Raleigh reported that the Triad combination would create a bank with roughly $1 billion in assets. The Bank Slate reported that M&F had $517.5 million in assets and Triad had $536 million. Triad’s stated goal of a Nasdaq listing within 12 to 18 months is a proposal projection, not a completed listing or guaranteed outcome.
Neither transaction has closed. M&F has not accepted Triad’s proposal, and shareholders are scheduled to vote on the Optus agreement when the adjourned meeting reconvenes Oct. 20.
Image: Historic Mechanics and Farmers Bank building in Durham. Jerrye & Roy Klotz, MD/Wikimedia Commons/CC BY-SA 3.0; NC Business Desk.