2008 Woodie Awards
CapitalSource, TierOne move along with merger
Marc Miner
Issue date: 2/26/08 Section: News
A merger between CapitalSource and TierOne Bank will inch on with a provision that would allow either company to terminate the agreement after Feb. 17 without penalty.
TierOne, a Lincoln-based bank, is a federal savings bank that offers consumer, commercial and agricultural banking products. It has 69 banking offices in Nebraska, Iowa and Kansas and loan offices in other states.
CapitalSource, a Chevy Chase, Md.-based company, is a middle market lender that helps businesses with leveraged buyouts, acquisitions and work capital needs, among other things.
On Feb. 18, CapitalSource called for its CEO, John Delaney, to either "terminate the merger or negotiate new terms for the transaction," according to a CapitalSource press release.
Michael Weiss, CapitalSource's director of communications, was unable to comment further. He did point to statements made on the company's Web site.
In May 2007, both companies approved the $652 million deal, and in a 2007 November meeting, shareholders approved the deal.
The Office of Thrift Supervision (OTS), a federal regulatory agency, still needs to approve the deal.
When one federally-insured institution acquires another institution of the same type, the review of the merger takes an average of five months to review, said Ed Swotek, a senior vice president in TierOne's investor relations department.
The merger has been in the hands of the OTS for about nine months since both companies signed the deal.
"In this particular situation, a private non-regulated special financed lender is acquiring a federally insured institution in a period of time under not-so-normal market conditions," Swotek said. He added the approval may take longer than is considered average.
CapitalSource still intends to acquire TierOne, which would allow the company to bear more financial backing for their lending services.
"We view deposit-based funding as a very attractive source of funding for the business. We think our assets are very much bank-like," Delaney said in a transcribed interview pulled from CapitalSource's Web site.
If the merger goes through, it would make TierOne a wholly-owned subsidiary of CapitalSource.
"The plan is TierOne headquarters will continue to remain in Lincoln, the name will not change, the management personal and structure will not change," Swotek said. "To the person on the street, the transaction should be virtually transparent."
TierOne's shares closed Monday at $14.81. Its 52-week low was $14.58, which was also hit on Monday. Its 52-week high was $33.02 last May.
marcminer@dailynebraskan.com
TierOne, a Lincoln-based bank, is a federal savings bank that offers consumer, commercial and agricultural banking products. It has 69 banking offices in Nebraska, Iowa and Kansas and loan offices in other states.
CapitalSource, a Chevy Chase, Md.-based company, is a middle market lender that helps businesses with leveraged buyouts, acquisitions and work capital needs, among other things.
On Feb. 18, CapitalSource called for its CEO, John Delaney, to either "terminate the merger or negotiate new terms for the transaction," according to a CapitalSource press release.
Michael Weiss, CapitalSource's director of communications, was unable to comment further. He did point to statements made on the company's Web site.
In May 2007, both companies approved the $652 million deal, and in a 2007 November meeting, shareholders approved the deal.
The Office of Thrift Supervision (OTS), a federal regulatory agency, still needs to approve the deal.
When one federally-insured institution acquires another institution of the same type, the review of the merger takes an average of five months to review, said Ed Swotek, a senior vice president in TierOne's investor relations department.
The merger has been in the hands of the OTS for about nine months since both companies signed the deal.
"In this particular situation, a private non-regulated special financed lender is acquiring a federally insured institution in a period of time under not-so-normal market conditions," Swotek said. He added the approval may take longer than is considered average.
CapitalSource still intends to acquire TierOne, which would allow the company to bear more financial backing for their lending services.
"We view deposit-based funding as a very attractive source of funding for the business. We think our assets are very much bank-like," Delaney said in a transcribed interview pulled from CapitalSource's Web site.
If the merger goes through, it would make TierOne a wholly-owned subsidiary of CapitalSource.
"The plan is TierOne headquarters will continue to remain in Lincoln, the name will not change, the management personal and structure will not change," Swotek said. "To the person on the street, the transaction should be virtually transparent."
TierOne's shares closed Monday at $14.81. Its 52-week low was $14.58, which was also hit on Monday. Its 52-week high was $33.02 last May.
marcminer@dailynebraskan.com
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