trending Market Intelligence /marketintelligence/en/news-insights/trending/fkoiydmdcqqe16bzq_4smg2 content esgSubNav
In This List

Tennessee Bancshares initially rejected SmartFinancial's offer

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Tennessee Bancshares initially rejected SmartFinancial's offer

In Tennessee, Tullahoma-based Tennessee Bancshares Inc. initially rejected Knoxville-based SmartFinancial Inc.'s proposal, and entertained interest from two other institutions, before ultimately accepting an agreement to merge Southern Community Bank and SmartBank.

SmartFinancial had been looking to boost SmartBank's assets to more than $2 billion through an acquisition, the company's Feb. 28 securities filing said, while Tennessee Bancshares had been considering long-term strategies to maximize its shareholder value.

The two companies signed a confidentiality agreement in July 2017, after Tennessee Bancshares directed its financial adviser, Olsen Palmer, to contact companies that might be interested in pursuing a merger.

In early August, both SmartFinancial and another company submitted nonbinding indications of interest. SmartFinancial initially proposed an all-stock deal valued at $18.50 per share.

After negotiations, SmartFinancial revised its offer up to $18.75 per share, which was higher than the all-cash deal proposed by the other company. However, on Aug. 22, Tennessee Bancshares' board opted not to accept SmartFinancial's offer due to several issues including price.

The communication between the two companies did not stop there, though. Two days after Tennessee Bancshares initially rejected SmartFinancial's offer, the two companies were discussing a revised indication of interest.

But on Sept. 6, Tennessee Bancshares engaged in talks with yet another company. A little over a week later, Tennessee Bancshares' board voted to accept SmartFinancial's revised offer.

Over the next couple of months, the two companies negotiated on issues such as deal timelines, due diligence reviews and revisions to the merger agreement. The companies also decided on a fixed exchange ratio of 0.8065 share of SmartFinancial's common stock for each Tennessee Bancshares common share held.

On Dec. 12, the two companies executed their merger agreement and announced the deal.