MB Financial Agrees To Buy Taylor Capital For About $680 Mln - Update

(RTTNews) - MB Financial, Inc. (MBFI) and Taylor Capital Group, Inc. (TAYC) Monday announced a definitive merger agreement for MB to acquire Taylor Capital in a deal valued at about $680 million.

The per share merger consideration is currently valued at about $22.00 per Taylor Capital share, resulting in an overall transaction value of around $680 million, inclusive of stock option, warrant and restricted stock cash-outs.

When the merger is completed, each share of Taylor Capital common stock and nonvoting preferred stock will be converted into the right to receive 0.64318 shares of MB Financial common stock and $4.08 in cash, representing an aggregate consideration mix of 81 percent MB Financial stock and 19 percent cash.

The stock portion is expected to be tax-free. Shares of Taylor Capital's perpetual non-cumulative preferred stock, Series A, will be exchanged for shares of MB Financial preferred stock with substantially identical terms.

The merger agreement provides that any shares of Taylor Capital's fixed rate cumulative perpetual preferred stock, Series B, which are not redeemed by Taylor Capital before the merger will be redeemed by MB Financial at the time of or promptly after the merger.

Taylor Capital is the holding company of Cole Taylor Bank, a commercial bank headquartered in Chicago. The bank has $5.9 billion in assets, $3.3 billion in loans and $3.7 billion in deposits as of June 30. MB Financial is the $9.4 billion Chicago-based holding company of MB Financial Bank, N.A.

The combination is expected to nearly double MB Financial's middle market commercial banking market share in the Chicago area. Taylor Capital's nine branches complement MB Financial's existing network of 85 Chicago-area branches.

The combination is expected to have a top-10 deposit market share ranking in the Chicago MSA and top-5 deposit market share ranking in Cook County.

Mitchell Feiger, President and Chief Executive Officer of MB Financial, said, "The merger of Taylor Capital and MB Financial is a terrific strategic transaction. Each side brings a strong middle market commercial banking business as well as significant national niche businesses." The merger is expected to close in the first half of 2014. It is expected to be immediately accretive to MB Financial's annual GAAP and cash earnings per share.

Taylor Capital President and Chief Executive Officer Mark Hoppe will become President and Chief Executive Officer of MB Financial's subsidiary bank, MB Financial Bank.

Upon completion of the merger, Jennifer Steans and Bryan Daniels from Taylor Capital's board of directors will join the MB Financial board.

The definitive agreement was unanimously approved by the boards of directors of MB Financial and Taylor Capital.

MBFI closed up 1.6 percent on Friday at $28.17. TAYC rose 1.8 percent to close at $17.81.