Prior to accepting Wheeling, W.Va.-based WesBanco Inc.'s offer, Frankfort, Ky.-based Farmers Capital Bank Corp. was looking at acquiring another company.
Jim Rickard, president for Kentucky and Southern Indiana for WesBanco, first floated the idea of a potential merger with Farmers Capital President and CEO Lloyd Hillard Jr. in August 2017. At that time, Hillard said that Farmers Capital was considering growth via acquisition rather than sale.
In November 2017, WesBanco submitted a nonbinding indication of interest to Farmers Capital, proposing an all-stock deal that would value Farmers Capital between $48 and $52 per share. This represented an aggregate purchase price between $361 million and $391 million.
Meanwhile, the Farmers Capital board instead authorized to pursue the potential acquisition of another company. On Dec. 21, 2017, said company informed Farmers Capital that it was unwilling to sell.
In January, WesBanco submitted another nonbinding indication of interest that narrowed the valuation of Farmers Capital's stock to between $50 and $52 per share, or an aggregate purchase price between $376 million and $391 million. The offer was made after WesBanco President and CEO Todd Clossin met with Hillard to discuss WesBanco's initial indication of interest.
Further negotiations and due diligence ensued until WesBanco sent Farmers Capital a draft merger agreement on March 28. The draft included an all-stock consideration at an exchange ratio of 1.151 WesBanco shares for each share of Farmers Capital. The terms of the proposed deal were again negotiated through April 19, when the merger consideration was set at 1.053 WesBanco shares and $5.00 in cash for each Farmers Capital share. The $378.2 million deal also includes a termination fee of $12.0 million, payable to WesBanco under certain circumstances.