A $1 million special cash dividend was part of Pine Bluff, Ark.-based Simmons First National Corp.'s initial offer for Columbia, Mo.-based Landrum Co., a regulatory filing revealed.
Landrum's board appointed a special committee to explore strategic alternatives in November 2018 and financial adviser Keefe Bruyette & Woods subsequently contacted five potential partners, including Simmons First. Landrum executives then held talks with Simmons First and an unnamed company regarding a potential business combination. The unnamed company submitted its proposed financial deal terms and Landrum in May asked that company to increase its financial terms. The company declined and the parties terminated negotiations.
Landrum and another potential partner met in March but talks broke down shortly as Landrum did not think the company would have been a good cultural fit, among other things.
Simmons First submitted an initial offer in May — made up of 80% stock and 20% cash — and revised to an all-stock offer in July. It offered 17,100,000 of its common shares in exchange for all Landrum common shares and a special cash dividend of $1.0 million. Landrum countered the offer and asked that the stock consideration be increased to 17,450,000 shares and that holders of Landrum series E preferred stock receive shares of Simmons series D preferred stock. It also proposed to keep the special dividend part of the deal.
Simmons First on July 5 made its revised offer, increasing the stock consideration to 17,350,000 common shares and agreeing to the preferred share exchange and to Landrum's demands to terminate the deal if both the absolute value of Simmons First's common stock were to drop substantially or if Simmons First stock's relative performance compared to an index of publicly traded financial institutions lagged by a material amount. The $1 million special cash dividend was not part of the revised offer.
Landrum agreed to these terms, and the deal was announced July 31.
