By Lisa Kerner
Charlotte, N.C., Jan. 9 - The boards of directors of Hampton Roads Bankshares, Inc. and Shore Financial Corp. approved a merger of the two companies, it was announced on Wednesday.
Shore Financial will merge with and into Hampton Roads Bankshares, a news release stated.
Under the merger agreement, Shore Financial shareholders will receive either $22 in cash, 1.8 shares of Hampton Roads Bankshares common stock, or a combination of cash and shares for each share of Shore Financial, subject to proration.
Hampton Roads Bankshares reserved the right to increase the cash portion of the consideration up to 50% of the total merger consideration if Shore Financial shareholders elect to receive less than 55% of the total consideration in stock, the release stated.
The merger is slated to close in the second quarter of 2008.
A $1 million termination fee is included in the agreement, according to a form 8-K filing with the Securities and Exchange Commission.
Scott C. Harvard will continue as president and chief executive officer of Shore Bank and as an executive vice president of Hampton Roads Bankshares.
"The addition of Shore Bank with Bank of Hampton Roads under Hampton Roads Bankshares, brings together two extraordinary banks with excellent reputations, similar performance-driven cultures, and operating strengths that are highly complimentary," Hampton Roads Bankshares president and CEO Jack W. Gibson said in the release.
"Both of our organizations share a vision to grow and be the market leader without compromising profitability. Shore's talented and well-respected management team will be instrumental in guiding our growth into this market and helping us to take advantage of future opportunities throughout the Delmarva Peninsula," Gibson added.
Hampton Roads Bankshares was advised by McKinnon & Co., and Davenport & Co., LLC advised Shore Financial.
Shore Financial, based in Onley, Va., is the holding company for Shore Bank.
Norfolk, Va.-based Hampton Roads Bankshares is the financial holding company for the Bank of Hampton Roads.
| Acquirer: | Hampton Roads Bankshares, Inc.
|
| Target: | Shore Financial Corp.
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| Announcement date: | Jan. 9
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| Price per share: | $22.00 per share in cash, 1.8 shares of Hampton Roads Bankshares common stock, or a combination of cash and stock
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| Termination fee: | $1 million
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| Expected closing: | Second quarter of 2008
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| Stock price for acquirer: | Nasdaq: HMPR: $11.50 on Jan. 8
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| Stock price of target: | Nasdaq: SHBK: $12.89 on Jan. 8
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