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Peoples to buy Banknorth
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June 2, 1999: 9:38 a.m. ET
Deal linking two New England regional banks is valued at $780M
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NEW YORK (CNNfn) - Peoples Heritage Financial Group said Wednesday it will buy another New England regional banking company, Banknorth Group, for stock valued at $780.7 million.
Banknorth (BKNG) shareholders will receive 1.825 shares of Peoples Heritage (PHBK) common stock for each share of Banknorth common stock, plus cash for each fractional share they hold.
Based on a closing price of $18 for Peoples Heritage Tuesday, the cash equivalent value of the deal is $32.50 per Banknorth share. About 42.9 million shares of Peoples Heritage stock will be issued under the deal. Banknorth shares closed up 1/16 at 26-3/4 Tuesday.
The new company, which will have assets of $17 billion, will be known as Banknorth. The acquisition will give Portland, Maine-based Peoples Heritage access to new markets in Vermont and upstate New York, as well as expanding its presence in New Hampshire and Massachusetts, the companies said. Banknorth is based in Burlington, Vt.
"As giant banks continue to emerge, it is important that institutions with the community banking style of the 'new' Banknorth be here to serve 'Main Street' New England and upstate New York," Banknorth CEO William H. Chadwick said.
The banks said they hope to close the deal by the end of the year. 
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