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Cadence Bank offers new details on acquisition reversal

STARKVILLE — A proxy statement Cadence Bank filed with the U.S. Securities & Exchange Commission Wednesday sheds new light on one of the most high-profile reversals of the year – Cadence’s scrapping of a publicly announced “definitive” agreement to be acquired by Trustmark National Bank of Jackson in favor an offer by Houston banking investment group Community Bancorp LLC.
Executives of Starkville-based Cadence say a take-it-or-leave-it deadline set by Trustmark National on an acquisition offer led the bank’s and its board to prematurely reject an offer by rival suitor Community Bancorp Corp.

The proxy statement details the offers and counter offers that led to the jilting of Trustmark and its previously accepted offer of $20.62 per share of Trustmark shares. The transaction was valued at approximately $23.8 million, or $2 per Cadence common share.

The cash deal with Community Bancorp gives Cadence’s approximately 3,000 shareholders $2.50 a common share and severs their connections to Cadence as it becomes a privately held entity.

From the Trustmark deal, shareholders would have received a price of $20.62 per share of Trustmark. The transaction was valued at approximately $23.8 million, or $2 per Cadence common share, Trustmark officials said in the announcement of the now-dead deal.

Cadence had the Community Bancorp offer in hand on Sept. 17 but it was conditioned on “satisfactory due diligence and reaching an acceptable agreement with the U.S. Treasury regarding the TARP Preferred” payment of $38 million on the $44 million owed in TARP funds.

That same day, Trustmark put the squeeze on with a warning that a “definitive agreement must be entered into between us and Trustmark by Sept. 20, 2010 or Trustmark would terminate discussions with us,” the proxy statement says.

The statement continues: “On Sept. 19, 2010, CBC (Community Bancorp) furnished substantial comments to the form of merger agreement and expressed their willingness to continue negotiations on an agreement.
“Cadence continued to negotiate with both CBC and Trustmark. On Sept. 20, 2010, we reached agreement on all terms of a definitive merger agreement with Trustmark. Also on September 20, 2010, CBC sent us an indication of interest that reiterated its $2.50 cash price.”
Read Monday’s Mississippi Business Journal for more information.

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