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Seacoast Banking beat rival's all-cash bid for First Bank of the Palm Beaches


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Seacoast Banking beat rival's all-cash bid for First Bank of the Palm Beaches

During its search for a partner, Florida-based First Bank of the Palm Beaches received indications of interest from four institutions, including one from Seacoast Banking Corp. of Florida that included a price of $5.24 for each outstanding First Bank common share.

First Bank's board discussed each of the offers and later on authorized management and financial adviser Keefe Bruyette & Woods Inc. to continue talks with and permit further due diligence by the two financial institutions providing what the board believed to be the highest bids, which included Seacoast.

Seacoast on Oct. 7, 2019, submitted a revised indication of interest that included an exchange ratio of 0.2096.

On Oct. 23, 2019, Seacoast CEO Denny Hudson and First Bank CEO Jay Shearouse discussed Seacoast's preliminary offer terms, including pricing. Hudson said Seacoast was unable to increase its proposed exchange ratio.

Later that day, First Bank's board met with representatives of KBW and legal counsel Gunster Yoakley & Stewart PA to review the bids of the two remaining financial institutions.

First Bank chose to partner with Seacoast, as its final bid was about 4.8% higher than its rival's, based on Seacoast's stock price as of Oct. 21, 2019. Moreover, Seacoast's bid proposed that the merger consideration consist 100% of publicly traded common stock, which was viewed favorably by the board following review of Seacoast's business and financial prospects, as well as the ability afforded to shareholders of being able to defer a tax event. The other suitor's bid was an all-cash offer and would result in an immediate taxable event for First Bank's shareholders.

And then, Seacoast's common stock rose from a closing price of $26.23 on Oct. 23, 2019, to a closing price of $28.69 on Oct. 29, 2019. Based on this increase, Seacoast's financial adviser Sandler O'Neill & Partners LP communicated to KBW that Seacoast planned to adjust its exchange ratio.

On Nov. 1, 2019, Seacoast provided a nonbinding letter of intent for the potential acquisition of First Bank, which included an exchange ratio of 0.2000.

The parties signed the merger agreement Nov. 19, 2019.