FNB Bancorp was approached by seven financial institutions during 2016 and 2017 for a possible strategic transaction, including by its ultimate acquirer, TriCo Bancshares.
FNB Bancorp's board on June 14, 2017, formed a nonemployee directors committee to interview at least three investment banking firms that could advise the board in matters of a possible transaction. On the recommendation of the committee, Courtney Group LLC was selected as the South San Francisco, Calif.-based company's adviser.
FNB Bancorp and Courtney Group, in a meeting on Aug. 16, 2017, identified 17 financial institutions including Chico, Calif.-based TriCo Bancshares as suitable candidates. As of Sept. 8, 2017, seven of the 17 institutions had declined interest, and 10 institutions executed a confidentiality agreement with FNB Bancorp and were provided access to FNB Bancorp's information.
Four out of the 10 institutions, including TriCo Bancshares, submitted nonbinding expressions of preliminary interest. FNB Bancorp's board then shortlisted TriCo and another company.
TriCo's competitor, in the initial proposal, had indicated its willingness to present a 1% higher offer than any other competitors.
The competitor on Oct. 10, 2017, submitted an updated all-stock offer with an implied value of $38.00 per share as of Oct. 9, 2017. However, the company did not repeat its intention to one-up competing offers by 1%.
TriCo initially offered an all-stock deal worth $41.50 per share but later submitted a revised proposal of 1.000 share of TriCo Bancshares common stock for each share of FNB Bancorp's common stock. The offer had an implied value of $41.85 per share as of Oct. 10, 2017.
TriCo's offer was given precedence by FNB Bancorp's board, and it suspended negotiations with the other suitor. The companies entered into a confidentiality and nondisclosure agreement Oct. 18, 2017.
TriCo further revised its offer to an exchange ratio of 0.980 share of TriCo Bancshares common stock for each share of FNB Bancorp common stock. The offer had an implied value of $40.81 per share as of TriCo Bancshares common stock on Dec. 8, 2017.
The TriCo Bancshares and FNB Bancorp boards approved the merger agreement Dec. 11, 2017. FNB Bancorp would pay a $12.0 million termination fee to TriCo Bancshares should the acquisition fall through under certain circumstances.