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SmartFinancial initially made all-stock informal offer for Foothills

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SmartFinancial initially made all-stock informal offer for Foothills

SmartFinancial Inc. approached Foothills Bancorp Inc. about acquiring Foothills in an all-stock merger long before the two banks announced a deal that included a mix of stock and cash, a regulatory filing shows.

The possibility of a merger was first broached between SmartFinancial President and CEO Billy Carrol and a Foothills board member in June 2017. In August of that year, Carrol and other SmartFinancial executives met Foothills CEO Mark Loudermilk and Chairman Samuel Evans to discuss the idea.

SmartFinancial's first proposal was an informal offer in September 2017 of 0.718 SmartFinancial share for each of Foothills' outstanding shares. That offer stood for several months while the companies discussed a potential merger.

In April, SmartFinancial made a nonbinding indication of interest at a Foothills board meeting with a new consideration proposal using an exchange ratio of 0.7384 SmartFinancial share, or $17.25 per Foothills share, subject to a mix of 85% stock and 15% cash.

The next month, SmartFinancial sent a revised offer that included a purchase price of $17.50 per share in cash for 10% of Foothills' stock and 0.74 share of SmartFinancial common stock for each of the remaining 90% of shares.

In June, the banks settled on a mix of stock and cash paid together for each Foothills share. SmartFinancial agreed to pay $1.75 and 0.666 of a SmartFinancial common share for each share of Foothills stock, making for a $37.4 million deal. The consideration mix was determined to be 90% stock and 10% cash.

The merger agreement was announced June 27.