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Star Banc joins buyout binge
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April 10, 1998: 2:33 p.m. ET
Cincinnati bank to pay $696 million for Trans Financial, based in Kentucky
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NEW YORK (CNNfn) - With a merger frenzy in financial services affecting banks big and small, Star Banc Corp. announced Friday it will buy Trans Financial Inc. for $696 million in stock
Under the deal, Cincinnati-based Star Banc will pay $57 per share for Trans Financial, of Bowling Green, Ky. Star expects to take a $40 million one-time merger-related charge.
The deal, while small in comparison to three recent multibillion dollar deals in the sector this week, is perhaps a fitting exclamation point to banking's mantra, now unmistakably clear: Consolidation is king.
On Monday, Travelers Group Inc. and Citicorp agreed to a deal worth more than $70 billion, the richest merger in corporate history.
The next day, consumer finance companies Beneficial Corp. and Household International Inc. inked a merger worth $8.6 billion, just as insurer Conseco Inc. said it would buy Green Tree Financial Corp. for $7.6 billion.
The deal today is expected to create a bank with assets of $16.8 billion and more than 380 branches across Indiana, Ohio, Kentucky, and Tennessee.
"Trans Financial is an outstanding organization and has developed a high quality employee base," said Jerry Grundhofer, Star's chairman, president and chief executive officer, in a joint statement with Trans Financial.
The deal, accounted for as a pooling of interests, is expected to be completed in the third quarter this year, the companies said.
Trans Financial has $2.2 billion in assets and 56 branches in Kentucky and Tennessee. Star Banc is a $14.8 billion holding company with 328 full-service bank locations in Indiana, Kentucky and Ohio.
"Combining with Trans Financial gives Star the opportunity to attract new customers and further extend our platform of services into geographic regions which are natural extensions of our existing Kentucky franchise and into important new growth markets in Tennessee," Grundhofer said.
In the deal, Trans Financial shareholders are to receive 0.9003 StarBanc share for each of their shares, based on yesterday's closing price.
StarBanc shares (STB) rose 1-5/16 to 63-5/16, while shares of Trans Financial (TRFI) soared 5-3/8 to 52-5/8 in Thursday trading.
Upon completion of the deal, Trans Financial Chairman and Chief Executive Officer Vince Berta will become regional chairman responsible for the existing Trans Financial markets, and an executive vice president at Star. He will report directly to Grundhofer.
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