Pharma Says "What Crisis?"

This morning, Pfizer announced that it has agreed to acquire Wyeth. Consideration will amount to about $50 per Wyeth share in cash and stock. Total price is $68 million. No SEC disclosure so far, though both companies released their 2008 financials this morning. Both made money. The New York Times has a good article pointing out that this merger is unusual because (a) banks, not the federal government, loaned money and (b) both companies are doing well. Just like the halcyon days of old.

Briefly Noted: FAS 157, JP Morgan, Deal Points Study

SEC Chairman Cox thinks mark-to-market (FAS 157) is a good system, says the New York Times.

Reuters reports that the JP Morgan / Bear Stearns merger has survived a court challenge.

The Harvard Corporate Governance blog provides the full text of the ABA report on merger agreement terms, aka the "Deal Points" study. As well as the full text of the court's opinion in JP Morgan / Bear Stearns matter.

Small Bank TARP Scorecard

Now that the 11/14 deadline is well past, it seems like a propitious time to summarize TARP money handed out to smaller banks. The deals, listed below, involve 41 banks and range from $4 million to almost $7 billion. The grand total for all the transactions is about $31 billion. Putting together this list gave me the same feeling that I used to get if I spent too long in ABC Carpet & Home - I started to lose perspective about what constitutes a lot of money. I found myself thinking "Why did Heritage Financial bother if all they got was a lousy 3.6 million bucks?"

See this post for a summary of big-bank TARP transactions, and this Reuters article for TARP scorecard of all transactions as of the date of the deadline.

If you'd like a copy of the list below as a Word doc, email me and I'll send it to you.

1st Financial Services Corp, 11/18, $16
Associated Banc-Corp, 11/21, $525
Ameris Bancorp, 11/21, $52
BB&T Corp, 11/19, $3,100
Banner Corp, 11/24, $124
Boston Private Financial, 11/24, $154
Broadway Financial Corp, 11/19, $9
Capital One Financial Corp, 11/18, $3,550
Cascade Financial, 11/26, $38
Centerstate Banks of Florida, 11/24, $4,200
City National Corp, 11/24, $395
Comerica Inc, 11/19, $2,250
Columbia Banking System Inc, 11/21, $77
First Community Bancshares, 11/24, $41
First Community Corp, 11/25, $11
First Horizon National Corp, 11/17, $866
First Niagara Financial Group, 11/25, $186
First Pactrust Bancorp Inc, 11/21, $19
HF Financial Corp, 11/24, $25
Heritage Commerce Corp, 11/26, $40
Heritage Financial Corp, 11/25, $4
Huntington Bancshares, 11/14, $1,400
KeyCorp, 11/20, $2,500
Marshall & Ilsley Corp, 11/14, $1,700
Northern Trust Corp, 11/17, $1,500
Pacific Capital Bancorp, 11/26, $180
Porter Bancorp, Inc, 11/24, $35
Provident Bankshares, 11/17, $151
Regions Financial Corp, 11/18, $3,500
Severn Bancorp, 11/24, $23
TCF Financial, 11/14, $54
Taylor Capital Group, 11/24, $104
Trustmark Corp, 11/25, $215
UCBH Holdings Inc, 11/20, $298
US Bancorp, 11/14, $6,600
Umpqua Holdings Corp, 11/14, $214
Valley National Bancorp, 11/17, $300
Washington Federal, 11/17, $200
Webster Financial Corp, 11/24, $400
Western Alliance BanCorporation, 11/25, $140
Zions Bancorporation, 11/17, $1,400

How Many More Tombstones in The Graveyard of Cancelled Deals?

The stock market, not content to just kill itself, clutched at two deals as it tumbled past. On Tuesday, BHP Billiton announced that it was abandoning its many-billions-of-dollars offer for Rio Tinto plc because the deal was no longer in the best interest of BHP's shareholders.

The cancellation has had ominous repercussions for Rio Tinto. Its stock is down a third and it is facing a ratings downgrade. It is planning to sell assets to pay down the debt it incurred when it bought Alcan.

Today, the private equity consortium which has, since July of 2007, been trying to buy BCE Inc. announced that their auditors were not able to certify that the post-acquisition BCE would be solvent. The $50 billion BCE transaction is a leveraged buyout. BCE would take on $33 billion in debt to fund the transaction. BCE has also gotten clobbered in trading today making it less likely that they'll be solvent by the drop-dead date of December 11th. More from Reuters here.

The BCE acquisition agreement is attached to a 13D/A filed July 5, 2007. The "Final Amending Agreement" was filed as a 6-K on July 10, 2008.

I wasn't able to find a proposed agreement in the BHP / Rio Tino deal, just lots of PowerPoints. Has anyone seen it?

Hot and Cold Under the TARP

At the end of last week, nine banks indicated that they would be getting money from the Treasury Department's Troubled Asset Relief Program. Terms were dislcosed and agreements appended to a flood of 8-K filings:

Bank of New York Mellon Corp (8-K, 10/30)
Wells Fargo (8-K, 10/30)
Bank of America (8-K, 10/30)
Morgan Stanley (8-K, 10/31)
JP Morgan (8-K, 10/31)
Citigroup (8-K, 10/31)
State Street Corp. (8-K, 10/31)
Goldman Sachs (8-K, 10/31)

Meanwhile, at least two banks declared their intention to refuse TARP money (Home Federal Bancorp, 8-K, 10/31 and Cullen Frost Bankers Inc., 8-K, 10/31). Will this be a trend?

The American Banker's Association continued to pepper Treasury with letters expressing, "The anger of bankers over the confusion and lack of clarity of the capital [...] program's function." The ABA wants to know if the Treasury is trying to, "provide capital to strongly capitalized institutions" or, "help failing institutions."

I blogged about the treasury behaviour that's got the ABA ticked off here.

West search tips: a Westlaw Business global search for "securities purchase agreement" w/100 "troubled asset relief program" retrieved all nine of the 8-K's announing participation in the program.

A search for "troubled asset relief" in the M&A-DEALS database on Westlaw retrieved profile information about four of the nine deals. I retrieved profiles of other crash-related deals by putting "department of the treasury" or "federal reserve" in the acquiror field.

TARP Money Goes to Ohio

In an 8-K filed on the 24th, PNC Finanical Services Corp. (PNC) announced that it would acquire National City Corp. (NCC). The money for the acquisition (dubbed a "take-under" because the price is below NCC's market cap) comes from the Treasury bailout fund. PNC will sell eight billion dollars in securities to Treasury. So, Treasury buys PNC and PNC uses the money to buy NCC. Apparently, NCC applied for TARP money and was turned down. As Business Law Prof observed someone in Treasury is reorganizing the Ohio banking industry.

So far the agreements aren't public, but Treasury has posted a term sheet on its website. Through TARP Treasury is buying preferred shares - they are senior to common and pay 5% return for 5 years and 9% thereafter. They also carry a veto on dividends.

Wachovia / Wells Fargo

On October 9th, Wachovia (WB) filed an 8-K announcing its merger with Wells Fargo. A number of merger-related agreements were attached. Exhibit 2.1 is the merger agreement, exhibit 2.2 is a share exchange agreement and exhibit 4.1 is a modification of Wachovia's poison pill.

Goldman Sachs / Berkshire Hathaway

This morning Goldman Sachs Group (GS) filed its third quarter 10-Q. Attached to it as exhibit 10.1 is the Securities Purchase Agreement between Goldman and Berkshire Hathaway Inc.

See this post for the location of other crash-related agreements.

Financial Collapse Agreements, etc.

Today Bank of America and Merrill Lynch filed an S-4 joint proxy statement. To help you navigate the recent deluge of filings, here's a recap of other major crash-related documents filed thus far:

Washington Mutual, Inc (WAHUQ)
9/30, Bankruptcy Court, District of Delaware
* Voluntary petition for bankruptcy, file # 08-12229

American International Group & The Federal Reserve (AIG)
9/26, 8-K:
* Credit Agreement (ex 99.1)
* Guarantee and Pledge Agreement (ex 99.2)

Bear Stearns & JP Morgan Chase (JPM)
4/11, S-4
* Joint proxy statement and prospectus
* Agreement and plan of merger (Appendix A)

Lehman Brothers
9/15, Southern District of New York, Bankruptcy Court
* Voluntary Petition for Bankruptcy, file # 1:08-BK-13555

Merrill Lynch & Bank of America (MER, BAC)
10/2, S-4
* Joint proxy statement and prospectus
* Agreement and Plan of Merger (Appendix A)