Capital One Buying Hibernia
Updated from 5:04 p.m. EST
Capital One Financial
(COF) - Get Report
is acquiring
Hibernia
(HIB)
for $5.35 billion, the companies announced Sunday.
Based on the price of Capital One shares at Friday's close, the transaction is valued at $33 per Hibernia share. The total transaction value includes about $2.4 billion in cash. The price represents a 24% premium over Hibernia's closing price on Friday.
Capital One shares closed Friday at $78.08, up $1.48, or 1.93%. Hibernia shares closed Friday at $26.57, up 39 cents, or 1.49%.
The combined company will be one of the 10 largest consumer lenders and one of the top 20 in terms of total deposits.
The transaction will combine Capital One, a bank holding company that is one of the nation's largest consumer financial services companies, with Hibernia, a financial holding company with operations in Louisiana and Texas.
Hibernia has 207 locations throughout Louisiana and 109 locations in Texas.Hibernia will become a subsidiary of Capital One, with Hibernia President and Chief Executive Officer J. Herbert Boydstun serving as president and reporting to Capital One Chairman and Chief Executive Officer Richard D. Fairbank. Hibernia's chairman, E.R. Campbell, will join Capital One's board.
"This acquisition is a natural extension of the diversification strategy that we have been pursuing for some time," Fairbank said. "The transaction brings together two financial companies with complementary strengths and represents a compelling long-term value proposition for shareholders of both companies.
"Hibernia's leading market share in Louisiana and its promising Texas branch expansion creates not only a solid growth platform as we continue to expand, but also an additional source of lower cost funding."
Said Boydstun: "With Capital One, we will gain access to higher-growth consumer financial services businesses where Capital One's 48 million accounts and national brand make it an established leader."