In the thick of the deal process between Brentwood, Tenn.-based Commerce Union Bancshares Inc. and Boulevard Columbia, Tenn.-based Community First Inc., the latter's CEO, Louis Holloway, received an unsolicited telephone voicemail message from an investment banker that purported to represent a bank holding company in the Middle Tennessee region inquiring about a proposed combination with Community First.
On May 23, six days after the unsolicited telephone voicemail message, Holloway received an unsolicited follow-up email from the investment banker.
Nothing came out of the unsolicited communications, as Community First had an outstanding duty to negotiate exclusively with Commerce Union. Also, the extremely low likelihood that the interested bank holding company could consummate a deal in a timely fashion without undue regulatory risk was taken into consideration.
Commerce Union's proposed acquisition of Community First was announced on Aug. 23. Discussion of the preliminary terms of the potential merger, including an initial proposed exchange ratio range of 0.3865 to 0.4093, took place several months before, in February.
An initial nonbinding indication of interest was submitted on April 13, reflecting a proposed exchange ratio of 0.4956. Discussions, the exchange of information and the conduct of due diligence ensued.
On June 8, the initial draft of the merger agreement, which reflected a reduced exchange ratio, was discussed. During the meeting, the proposed exchange ratio was deemed not acceptable and the parties discussed a minimum exchange ratio that would be acceptable to the Community First board.
The executive committee of Community First's board authorized the company's financial adviser, ProBank Austin, to continue to negotiate to increase the exchange ratio. ProBank Austin and Commerce Union's financial adviser, Keefe Bruyette & Woods Inc., had discussions regarding the exchange ratio.
A revised draft of the merger agreement was submitted June 19. In the following months, the parties worked towards finalizing the deal. On Aug. 22, the boards of the two companies approved the merger agreement.