Covid-19 impact leads to termination of Commerce State Bank acquisition
The Covid-19 pandemic has led to the end of Commerce State Bank's plans to be acquired by a firm from Green Bay.
In February, West Bendbased Commerce Financial Holdings Inc., the parent company of Commerce State Bank, announced it would be acquired by Nicolet Bankshares Inc. (Nasdaq: NCBS), the parent company of Nicolet National Bank.
Circumstances spurred by the novel coronavirus crisis have hammered Nicolet's stock price, according to a news release, and the two banks have decided to end the nearly $130 million allstock deal.
Commerce State Bank shareholders were to receive 1.15 shares of Nicolet common stock for each share of
Commerce stock, the banks said in February. Nicolet had a closing price of $72.32 on Feb. 14, meaning the deal was valued at about $129.6 million.
Commerce State Bank chief executive officer Joe Fazio said at the time that the circumstances were right for the bank to move on its goals to become a publicly traded, billion- dollar- plus institution.
But Nicolet's common stock fell more than 30% since the financial institutions reached their agreement, according to a news release. Nicolet stock has not traded at or above $62 per share for more than two months.
Either party had the option to terminate the transaction if the price dropped below $62 per share at the time set for closing.
The banks do not believe the stock price will reach $62 per share within the timeframe provided in their agreement. The deal had been expected to close in mid-summer but "it is unlikely that the merger will close based on Nicolet's intention to terminate in such circumstances," the release says.
Instead, the banks decided the best decision for shareholders, customers and employees was to terminate the deal. In light of the costs Commerce State Bank incurred in pursuit of the deal, Nicolet will pay the Commerce State Bank $500,000 and surrender 4,000 shares it holds of Commerce State Bank common stock.
Commerce State Bank opened in August 2005 and has offices in West Bend, Cedarburg, Elm Grove and Sheboygan. The bank holds $729 million in assets, the release says.