C. Malcolm Holland III, Manny Mehos and Geoff Greenwade — the CEOs of Veritex Holdings Inc., Green Bancorp Inc. and Green Bank NA, respectively — met on May 1 in Houston, where Holland was attending a banking conference. They discussed in general terms the merits of a potential transaction between Green Bancorp and Veritex.
Dallas-based Veritex and Houston-based Green Bancorp entered into a customary mutual confidentiality agreement the following day.
On May 30, Holland presented Mehos the material terms of a nonbinding term sheet that involved an all-stock transaction and an exchange ratio of 0.76 of a Veritex common share for each Green Bancorp common share.
The exchange ratio was revised to 0.78 on June 1, and to 0.79 a week later.
Veritex and Green Bancorp announced the proposed transaction July 24. The merger agreement includes a termination fee of $40 million, payable by either Veritex or Green Bancorp, should the deal fall through under certain circumstances.