DURHAM — M&F Bancorp rejected a second amended unsolicited proposal from an unidentified bank, reaffirming its planned Optus Financial merger less than three weeks before an Oct. 7 shareholder vote.
The Sept. 22 M&F release says the rival proposal would provide $12 in cash and one share of preferred stock with a $19.25 liquidation value for each M&F common share. The structure calls for M&F to acquire the other bank, identified only as Party A, whose shareholders would own 51% of the combined company after closing.
M&F’s board unanimously determined that the proposal was inadequate and not reasonably likely to produce a superior offer. The board said its advisers estimated that the proposal’s aggregate value was lower than the up-to-$53.30-per-share cash consideration in the Optus agreement and carried additional execution, due-diligence and regulatory risks.
Triangle Business Journal independently reported the competing proposal and M&F’s rejection ahead of the scheduled Optus vote.
The decision keeps the Optus transaction on its current path but does not complete it. M&F shareholders are scheduled to vote Oct. 7, and the merger remains subject to shareholder and regulatory approvals. M&F said all regulatory applications for the Optus deal have been submitted.
The competing proposal is material to Durham because it presented an alternative ownership and control structure for one of North Carolina’s minority depository institutions. M&F is headquartered in Durham and operates branches in Durham, Raleigh, Charlotte, Greensboro and Winston-Salem.
Party A remains undisclosed, and no transaction with that bank is pending after the rejection. The preferred stock’s stated liquidation value is not the same as cash received at closing, so the proposal should not be described as a $31.25 cash offer.
Image: Historic Mechanics and Farmers Bank building in Durham by Jerrye & Roy Klotz, MD, via Wikimedia Commons, licensed CC BY-SA 3.0. The 2007 file photograph was cropped, visibly labeled and given the standard NC Business Desk footer; no generative content.