PHOENIX -- Security Pacific Corp. Tuesday reached tentative agreement with Arizona Bancwest to acquire the holding company for The Arizona Bank for $480 million in cash.
Richard J. Flamson III, chairman of Security Pacific, whose principal subsidiary is the nation's seventh-largest bank, and Don B. Tostenrud, chairman of Arizona Bancwest, jointly announced the agreement under which Security Pacific will pay $45 in cash for each outstanding share of Arizona Bancwest.
Total purchase price will be about $480 million.
Security Pacific also has an option to purchase under certain conditions approximately 3.5 million shares of newly issued common stock at a cash price of $34 per share. About one-third of the company's shares currently are outstanding.
'This acquisition is an attractive investment in one of the nation's most dynamic and fastest growing states,' Flamson said. 'It makes good economic sense in that there are very strong business and consumer connections between California and Arizona. We have long conducted activities in Arizona, and this will materially increase our presence there.'
Arizona Bancwest and Arizona Bank will continue to operate under their current names, management and board of directors. Arizona Bank is the third largest bank in Arizona with 100 branches throughout the state and the 85th largest in the United States.
Under the agreement, the merger will be consummated Oct. 1, 1986 as permitted under recently enacted state legislation.
Under Arizona's new interstate banking law, any U.S. bank can buy or merge with an existing bank in Arizona after Oct. 1 1986, or apply for its own bank charter after July 1, 1992. In-state banks can buy or merge with other banks in Arizona at any time.
Security Pacific, based in Los Angeles, has assets of $47.9 billion. Arizona Bancwest has assets of $3.6 billion.