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BNP buys 55% of BancWest
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May 7, 2001: 5:21 a.m. ET
French bank plans to buy BancWest of U.S. for $2.45 billion to expand reach
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LONDON (CNN) - France's BNP Paribas said on Monday it plans to buy 55 percent of BancWest of the U.S. for $2.45 billion to expands its international reach.
The biggest bank in France by market capitalization said it is offering $35 for each BancWest (BWE: Research, Estimates) share, representing a 40 percent premium to BancWest's closing price of $24.98 on Friday.
BNP currently owns 45 percent of the Honolulu, Hawaii-based BancWest as a result of the 1998 merger of First Hawaiian and the parent company of Bank of the West. At the time, BNP owned the whole of Bank of the West.
BancWest, ranked as the 36th largest U.S. bank holding company with assets of $19.4 billion, serves 1.1 million households and businesses in six western U.S. states, that include California, Nevada, Oregon, Washington, Idaho and New Mexico.
BNP's bid values BancWest at 15.15 times expected 2001 earnings and 2.13 times its book value, BNP said. The French bank, with assets of $646 billion, expects the merger to boost earnings by 0.1 percent in 2001, excluding synergies, and by 0.6 percent in 2002.
The Paris-based bank said it would finance the acquisition from existing funds and said the impact on its balance sheet should be "more than compensated" by 2001 profits.
"The group's newly-granted status as a U.S. financial holding company will allow it to develop its U.S. franchise in areas such as bancassurance, where it has a recognized global expertise," said Baudouin Prot, Chief Operating Officer of BNP Paribas.
BancWest's chief executive Walter Dods said the board would meet later Monday to review the deal. The bid comes a month after exploratory discussions began between BNP and a special committee of independent directors.
"I am pleased that the special committee is recommending that our board approve the proposals," Dods said. "It's a compelling one that would be in the best interest" of shareholders and customers."
BNP Paribas (BNP) shares fell 0.6 percent to  95.95 in early Paris trading. 
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