Flushing Financial Corp. CEO John Buran and Empire Bancorp Inc. CEO Douglas Manditch have had a long-time business relationship, and over the years, Buran had informally indicated Flushing's interest in discussing strategic opportunities, although no specific formal or informal proposals were ever discussed.
But in July, Flushing formally proposed a transaction that valued Empire at a 10% premium over its then-current share price with 50% of the consideration payable in cash and the remainder payable in shares of Flushing common stock, to be based on a fixed exchange ratio determined prior to announcement, subject to, among other things, completion of due diligence.
Flushing revised its proposal Aug. 2, setting forth a nonbinding indication of interest that contemplated the same transaction structure, but increased the proposed exchange ratio associated with the stock portion of the consideration to 0.72 of a Flushing common share per Empire common share and the cash portion of the merger consideration to $14.26 per share.
After conducting due diligence, however, Flushing proposed an adjustment to the consideration, which resulted in a decrease in the exchange ratio to 0.654 and cash consideration of $13.32 per share. The Empire board rejected the proposal.
After further discussions, the parties agreed upon a final set of terms for the transaction, consisting of 50% of the purchase price payable in cash in an amount equal to $14.04 per share, with the remaining 50% payable in Flushing common shares, based on an exchange ratio of 0.6548 shares of Flushing common stock per share of Empire common stock.
The deal announcement was made Oct. 25.