May 29, 2014
/PRNewswire/ -- Eastern Virginia Bankshares, Inc. (NASDAQ: EVBS) ("EVBS"), the one bank holding company for EVB, and Virginia Company Bank (OTCQB: VGNA) announced today that EVBS, EVB and Virginia Company Bank have entered into a definitive Agreement and Plan of Reorganization (the "Agreement") under which Virginia Company Bank will merge into EVB, with EVB being the surviving bank, in a mixed-consideration transaction with an aggregate deal value of approximately
Under the terms of the Agreement, each share of common stock of Virginia Company Bank will be converted into and become the right to receive the following consideration, at the election of the shareholder:
- $6.25 in cash without interest, or
- 0.9259 shares of common stock of EVBS (subject to the payment of cash in lieu of fractional shares).
The Agreement provides that no more than 25% of the outstanding common shares of Virginia Company Bank will be converted into cash consideration. If the aggregate number of cash-electing common shares of Virginia Company Bank is greater than 25%, then the number of cash-electing common shares will be subject to proration, as more fully described in the Agreement.
Each share of preferred stock of Virginia Company Bank outstanding at the effective time of the merger will be canceled in exchange for the right to receive one share of a new series of preferred stock of EVBS with substantially identical rights to the Virginia Company Bank preferred stock, including, without limitation, identical liquidation preferences and voting rights.
EVBS anticipates the transaction to be mid-single digits accretive, on a percentage basis, to diluted earnings per share. Tangible book value per share, pro forma for the conversion of EVBS's outstanding mandatorily convertible Series B Preferred Stock, is expected to be diluted less than 1.5% with an earnback period of less than two years.