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Carolina Trust's offer for Clover Community was neck-and-neck with rival's bid

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Carolina Trust's offer for Clover Community was neck-and-neck with rival's bid

Five parties submitted nonbinding indications of interest to South Carolina-based Clover Community Bankshares Inc. on April 18.

The bids submitted by North Carolina-based Carolina Trust BancShares Inc. and another suitor represented the best combinations of highest valuation and lowest execution risk relative to the other proposals.

The Carolina Trust proposal valued Clover at about $21.5 million to $21.7 million or $21.75 to $22.25 per share in an 80%-stock and 20%-cash deal. The other suitor's proposal valued Clover at roughly $21.5 million or $22.00 per share in a 60%-stock and 40%-cash deal.

On May 23, Carolina Trust management presented an updated proposal for $22.00 per share with an 80%-stock and 20%-cash mix consideration and a fixed exchange ratio. The same day, its rival also reiterated its willingness to move forward with the transaction with a proposal for $22.50 per share, with a 60%-stock and 40%-cash mix and a floating exchange ratio, subject to a collar on the amount of shares of the institution to be issued as consideration. Both suitors also provided a markup of the draft merger agreement.

The Clover board discussed, among other things, the potential increase in value for the Carolina Trust offer due to fixed exchange ratio and the lack of a collar on the value of the Carolina Trust common shares to be issued to Clover shareholders. It voted May 29 to grant Carolina Trust a 60-day period of exclusivity to conduct additional due diligence and negotiate a definitive merger agreement with Clover.

Clover and Carolina Trust executed the merger agreement June 14. Should the deal fall through under certain circumstances, Clover will be required to pay Carolina Trust a termination fee of $900,000.