Saint Martinville, La.-based Saint Martin Bancshares Inc. had, on occasion, received unsolicited inquiries about a possible merger. But it was in April, after Raymond James came up with a list of 25 potential partners, that the company decided to pursue a deal.
The list of 25 institutions whittled down to 11. Of the 11, nine expressed interest. Six executed nondisclosure agreements; two submitted formal indications of interest. One was Home Bancorp Inc. of Lafayette, La.
Home made a 75% stock-25% cash offer, valuing Saint Martin at the time at $435.00 per share, or approximately $91.3 million in total. Its rival's all-stock bid valued Saint Martin at $396.00 to $409.00 per share, or $83.0 million to $85.8 million in the aggregate.
At Saint Martin's request, Home on May 25 improved its offer to an 80% stock-20% cash mix, with an implied value of $470.00 per share. The revised proposal also included the possibility of Saint Martin paying shareholders a special distribution in place of the cash consideration. On June 2, the parties executed the indication of interest. During June, July and early August, each party conducted extensive due diligence of the other party.
Negotiations in August resulted in an exchange ratio of 9.2839 Home common shares for each Saint Martin common share and a special cash distribution, prior to the merger's close, of $94.00 per share. The parties further agreed that two Saint Martin directors would join Home and Home Bank NA's boards and that the acquirer would enter into employment agreements with three of St. Martin Bank and Trust Co.'s officers.
At an Aug. 22 Home board meeting, Chairman Michael Maraist and board member Paul Blanchet III recused themselves from the merger vote. Maraist and certain of his family members are Saint Martin shareholders, while Blanchet is a partner in Saint Martin's auditor, Broussard Poché LLP. The following day, Saint Martin's board voted unanimously in favor of the merger agreement. The deal was executed the same day.