Peoples Bankshares Inc. considered an unsolicited indication of interest from "a larger peer bank holding company" but ultimately decided against going ahead due to the likelihood of heightened scrutiny during the regulatory approval process.
Peoples Bankshares started reviewing strategic alternatives after a student loan portfolio went sour. These discussions merged with more general discussions regarding strategic alternatives to enhance shareholder value, including a sale or merger and a potential capital raise.
The bank tapped Sandler O'Neill as independent financial adviser, which contacted 37 financial institutions to discuss their interest in a merger with Peoples Bankshares. Of these, 22 signed a nondisclosure agreement to access the data room. Five of these companies, including C&F Financial Corp., submitted letters of intent, and four of them were invited to the second round. One of the parties invited to participate in the second round withdrew from the process for reasons unrelated to Peoples.
The second round resulted in two competitive bids and one noncompetitive bid. With respect to competitive bids, C&F submitted a bid with an implied value of $54.00 per share and an out-of-market publicly traded bank holding company submitted a bid with an implied value of $52.00 per share. The Peoples Bankshares board decided to pursue C&F's proposal.
Over the next weeks, the parties conducted extensive business, legal, and financial due diligence investigations, and the merger agreement's initial draft was delivered July 31 to Peoples Bankshares' legal counsel Troutman Sanders LLP.
The definitive merger agreement was executed Aug. 13, and the announcement was made after markets closed that day.
