One of Hawaii’s most contentious and public business battles in years is drawing to an end, with Central Pacific Bank announcing today that its aggressive campaign to acquire rival City Bank has finally succeeded. Central Pacific will acquire all of City Bank’s outstanding shares at $91.83 each, a 26 percent premium over the value at yesterday’s closing bell. The combined bank will have assets of $4 billion, solidifying CPB’s position as the fourth largest player in the state behind First Hawaiian Bank, Bank of Hawaii and American Savings Bank. DISCUSS
CPB today repeated its promise of no “involuntarily lay-offs,” and to open a new branch for every overlapping branch created by the merger. The company also said it will set aside a one-time sum of $1 million for special community needs.
At the executive level, CPB’s Clint Arnoldus will head the new institution, with City Bank president and CEO Ronald K. Migita slated to become non-executive chairman of the board. CPB’s chief financial officer Neal Kanda will become president and chief operating officer of the combined company, and City Bank’s chief financial officer Dean Hirata will take the same position at the combined company. The CPB board of directors will be increased to fifteen members, with the addition of six current members of City Bank’s board.
The combined holding company and bank subsidiary will be called Central Pacific Financial Corp. and Central Pacific Bank, respectively.
Arnoldus, who led the charge to acquire City Bank, characterized today’s announcement as a “friendly, negotiated merger agreement.”
“This is an important milestone, which will enable us to combine the best of both our banks to deliver results to shareholders, opportunity for employees, enhanced service for customers and an even stronger commitment to the communities we serve for years to come,” he said in a statement.
“Today’s announcement ushers in a new and exciting chapter for both of our banks, which share a common history and heritage,” Migata said in a statement, acknowledging that CPB’s latest offer was too good to refuse.
“The substantial improvement in Central Pacific’s merger offer represents an attractive premium for CB Bancshares, Inc. shareholders and reflects our recent record performance as well as the future value of the Company’s franchise,” he noted.
Central Pacific Financial Corp. is a Hawaii-based $2.2 billion bank holding company for Central Pacific Bank, which is Hawaii’s third largest commercial bank with 24 branches statewide and more that 70 ATMs. CB Bancshares, Inc. is the holding company for City Bank, which maintains 22 branches on the islands of Oahu, Hawaii, Maui and Kauai.