Paris bank toShares of First Hawaiian Bank parent BancWest Corp. soared more than 37 percent in price today, after French banking giant BNP Paribas said it plans to pay $35 a share cash to gain total ownership of the Honolulu-headquartered company.
buy out BancWest
The bid for the parent ofBy Russ Lynch
First Hawaiian totals $2.45 billion;
CEO Dods could receive $56 million
BNP Paribas has owned 45 percent of BancWest since the November 1998 merger of its subsidiary, San Francisco-based Bank of the West, and First Hawaiian Inc. that created BancWest.
The announcement of the $2.45 billion purchase offer late last night included news that a special committee of directors of BancWest had already given unanimous approval to the deal, which will now go before the full BancWest board in a meeting scheduled for tonight.
The board is expected to approve it because the price is a 40 percent premium over last week's closing price of $24.98.
Beneficiaries of the deal include BancWest Chairman and CEO Walter A. Dods Jr., 59, who stands to get some $56 million for the 1.6 million shares he owns, including options, according to BancWest's last disclosure in March.
The Estate of S.M. Damon would get some $525 million for the 15 million-plus BancWest shares the Hawaii estate holds, based on shareholder disclosures.
The board committee that gave its approval, after just over a month of secret talks with the French bank, did not include Dods or any representative of BNP Paribas.
The news caused BancWest shares to rise as high as $34.50 today, from Friday's close of $24.98, up $9.52 or more than 37 percent.
BancWest closed at $34.31. It was the top gainer on the New York Stock Exchange.
The shares had huge volume, with more than 2.7 million changing hands compared to an average daily volume of 120,212 from the start of this year until the end of the day Friday.
Apparently shareholders decided to cash out now rather than wait months for the buyout to be completed.
Dods called the buyout proposal "a compelling one that would be in the best interests of all of our public stockholders" as well as BancWest's customers, community and employees.
Since BancWest was created a little over two years ago, it has expanded through mainland acquisitions.
It now has assets of $19.4 billion.
Its main subsidiaries are Bank of the West (193 branches in Northern and Central California, Oregon, New Mexico, Nevada, Washington state and Idaho) and First Hawaiian Bank (56 branches in Hawaii, two in Guam and one in Saipan).
BNP Paribas, which was Banque Nationale de Paris when the BancWest merger took place, is France's largest banking group and the 10th largest in the word, with assets of $646 billion.
In its own announcement in Paris, the French bank said it has had "a long and close relationship with the management of BancWest" and while not specifically saying by name that it will keep Dods and the other top management of BancWest, BNP Paribas said it "plans to rely on this team to continue guiding the institution."
The buyout, which is expected to take about six months to get through the necessary approvals, would result in BNP becoming sole owner of BancWest, which would no longer be a publicly traded company.