In a New Era, PNC To Buy National City

By Jennifer Yousfi

PNC Financial Services Group Inc. (PNC) became the first U.S. bank to make use of the government’s Troubled Assets Relief Program (TARP) with its plans to purchase National City Corp. (NCC).

Pennsylvania-based regional bank PNC announced today (Friday) that it would purchase Ohio-based National City in an all-stock transaction that values the struggling regional bank at $5.2 billion. Shareholders will receive 0.0392 PNC share for each National City share, or $2.23 per share, 19% less than National City’s closing price yesterday (Thursday).

In order to help facilitate the purchase, PNC will sell $7.7 billion in preferred stock and warrants to the Treasury Department’s bank recapitalization program.

"The acquisition of National City will increase our core deposit base to $180 billion, making PNC the fifth largest U.S. bank by deposits. At a time when core funding is key, we see our deposit strength as an important success factor,” said James E. Rohr, chairman and chief executive officer of PNC, in a company statement announcing the deal.

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Comments

[Rudy Mcpherson:]

What happens to NCC stock value? Does it go to zero like Washingon Mutual when it it aquired?

2008 Oct 24 02:06 PM

[alajac:]

the NCC shares will be worth whatever .0392 shares of PNC are worth until the deal is done, then you will have some fraction of PNC shares instead of the NCC shares.

2008 Oct 25 08:27 AM

[LIVID:]

two words for all NCC shareholders if this deal goes through: RIPPED OFF!!!!
few words for the feds and NCC board: ^%#%$@@&@%$&%@...

2008 Oct 25 10:44 PM