CPB Inc. (NYSE:CPF), parent company of Central Pacific Bank, today formerly proposed a merger with City Bank parent CB Bancshares, Inc. (NASDAQ:CBBI). CPB is offering $70 per share for CB stock, noting that it has “attempted several times to begin collaborative discussions between the two banks about a combination that would enhance their ability to serve Hawaii’s consumers and businesses.”
“Combining our institutions is the right fit at the right time for Hawaii’s future,” said CPB chairman, president and CEO Clint Arnoldus. “It will be good for our shareholders, good for our customers and most importantly good for Hawaii.”
The proposed merger would create a company that would retain the CPB, Inc. name and would have a market capitalization in excess of $600 million and total deposits of $2.8 billion, solidifying CPB’s status as one of Hawaii’s largest banks behind only Bank of Hawaii, First Hawaiian Bank, and American Savings Bank.
The proposal also includes a commitment by CPB to add $1 million to its local community support programs, on top of the current level of charitable contributions of both CPB and CB.
“We have tremendous respect for CB,” Arnoldus said. “Our two institutions share common roots, common values and a common market. No two banks are more intently focused on serving Hawaii’s consumers and businesses in a uniquely independent and local way.”
CPB’s announcement included a renewed call for a negotiated transaction between the two companies, but indicated it was prepared to take the proposal directly to the shareholders of both companies.
CB’s largest shareholder, Netherlands-based company TON Finance, supports the merger.
TON Finance believes the offer is an extremely attractive proposition for CB’s shareholders, and that the merger of these two Hawaii banks is a logical step forward and should create a much stronger institution,” said director Jiro Shirai.
Together, CPB and TON Finance control over 9 percent of CB stock.
Even with a green light from CB’s management, a merger would be subject to customary regulatory and shareholder approval.