Banc One acquiring First Commerce in $3 billion stock swap
NEW ORLEANS (AP) _ Banc One Corp., the nation’s eighth-largest banking company, is acquiring First Commerce Corp. for approximately $3 billion in stock in a deal that would create the largest bank in Louisiana.
Banc One, based in Columbus, Ohio, already operates in Louisiana as a result of the 1995 acquisition of Baton Rouge-based Premier Bancorp.
But the deal announced Monday would give Banc One a major presence in New Orleans, where First Commerce is based, plus additional banks in Alexandria, Baton Rouge, Lafayette, Lake Charles and Monroe.
Although Premier had a solid presence statewide, it had been no better than fourth in market shares in New Orleans, lagging behind Hibernia Corp., Whitney National Bank and First Commerce.
Banc One has assets of $140.7 billion, including $5.5 billion in Louisiana. It operates more than 1,200 banking offices in 12 states. First Commerce has $9.3 billion in assets.
The deal must be approved by stockholders of both companies and banking regulators, but the companies said they expected the transaction to be completed in the first quarter of next year.
In the deal, First Commerce stockholders would receive 1.28 shares of Banc One stock for each share of First Commerce stock. At Friday’s closing price, that would make First Commerce worth $70.64 a share, a premium of 21.5 percent over its pre-deal price.
Banc One shares tumbled $1.62 1/2 to close at $53.56 1/4 on the New York Stock Exchange, while First Commerce shot up 14 percent, or $8.25, to close at $66.37 1/2 a share on the Nasdaq Stock Market.
``The combination of our Louisiana franchises creates a very strong organization and certainly makes sense in light of the consolidation taking place in our industry today,″ said Ian Arnof, president and chief executive of First Commerce. ``This association will permit us to play an even more significant role in the strong economic growth we are experiencing in Louisiana.″
There was no immediate word on how many headquarters jobs at First Commerce would be affected by the merger. Banc One eliminated at least 100 jobs at Premier’s Baton Rouge headquarters when its bought that bank.
Banc One’s first involvement in Louisiana was in February 1991, when it received a purchase option for Premier Bancorp as it bought $65 million in capital notes from the company. At that time, Louisiana banks were struggling with losses from bad loans.