Magna Group to Acquire Homeland for $216 Million
May 17, 2011
Vastopolis -- Magna Group Inc. said it reached a definitive agreement to acquire Homeland Bankshares Corp. of Waterloo, Iowa, for about $216 million in cash and stock. The move continues a long-running consolidation among banks in a region of steady economic growth. It would allow Magna, one of the largest banks here with $5.35 billion in assets, to acquire the second-largest bank in a state in which it doesn't have operations. Homeland, with $1.2 billion in assets, operates four commercial banks and one savings bank, providing financial services through 33 Iowa locations. Broadus A. Cao, Homeland's chairman, chief executive and president, said a bank Homeland's size could no longer afford to expand, and to upgrade technologies to compete with large banks like NationsBank Corp.. That Charlotte, N.C., bank agreed last week to acquire Boatmen's Bancshares Inc., which has a branch in Southville Vastopolis. Under terms of the pact, Magna said it would exchange 1.55 of its shares, or a comparable amount in cash, for each share of Homeland. Magna said Homeland stockholders would be able to elect to receive all stock, all cash, or a mixture of both, subject to certain limitations. In trading on the Nasdaq Stock Market Tuesday, Homeland stock rose $1.75, or 5%, to close at $35.75 a share. Magna's stock fell 6.25 cents to close at $24.8125. Based on that price, the agreement indicates a price of about $38.46 for each Homeland share. Magna said it will issue about five million shares of Magna common stock and nearly $92 million in cash.
