PacWest Banc (NASDAQ:PACW) stock is rising higher on Wednesday after announcing it will combine with Banc of California (NYSE:BANC).
The merger will result in shareholders of PACW stock trading their stakes for BANC shares. They will receive 0.6569 shares of BANC stock for each share of PACW stock that they own. That will have them holding a 47% stake in the combined company.
When the merger is complete, the combined company will operate under the Banc of California name. It will also apply to become a Federal Reserve member. Holders of PacWest Banc’s 7.75% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, will also get substantially identical preferred stock of Banc of California.
Jared Wolff, President and CEO of Banc of California, said the following about the deal:
“This transformational merger will create a robust, well-capitalized and highly liquid institution poised to deliver exceptional service to even more California businesses and communities. We believe both Banc of California and PacWest stockholders will benefit from the compelling economics of the combined company and its enhanced ability to deliver profitable and sustainable growth.”
More PACW Stock Merger Details
To go along with the merger, Banc of California has entered into funding agreements with investors. This will provide it with $400 million from selling new shares and securities. That will give it strong capital levels and liquidity after the merger.
The combination of PacWest Banc and Banc of California has the unanimous support of both companies’ boards of directors. If all goes well, the deal should close in late 2023 or early 2024.
PACW stock is up 30%, and BACN stock is up 11.2% as of Wednesday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
