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East West to acquire MetroCorp for $273 million
September 19, 2013, 05:00 AM The Associated Press

PASADENA — East West Bancorp Inc. plans to acquire MetroCorp Bancshares Inc. in a $273 million deal that will expand its geographic footprint.

MetroCorp, based in Houston, is the parent company of MetroBank N.A. and Metro United Bank. It operates 18 branches in Texas and California under those names. Its assets total $1.6 billion, with total loans of $1.2 billion and total deposits of $1.3 billion.

East West Bancorp, based in Pasadena, Calif., is the parent company of East West Bank, which focuses exclusively on business in the United States and China. It operates more than 118 locations in China and six states in the U.S. and has estimated assets of $23.3 billion.

The companies said Wednesday that East West will acquire the outstanding shares of MetroCorp for the lesser of $14.60 per share and 1.72 times per-share tangible equity, for an estimated purchase price of approximately $273 million based on the company’s nearly 18.7 million shares outstanding.

MetroCorp shareholders will receive two thirds of the merger consideration in stock and the rest in cash. The exchange ratio to determine the number of East West shares that MetroCorp shareholders are due will be based on the average closing price of East West’s stock over the 60 trading days that end 5 days before the transaction closes.

The deal has been approved by the boards of both companies and is expected to be completed during the first quarter of 2014.

East West expects the deal will increase its 2014 earnings by 4 percent, excluding any one-time merger and restructuring costs. Analysts surveyed by Fact expect 2014 earnings per share for East West Bancorp of $2.22, on average.

The deal will bring East West from one branch in Texas to 13 branches, including nine in Houston and four in Dallas. It will also add six branches to East West’s California branch network, including one branch in San Diego.

MetroCorp shares soared $2.75, or more than 25 percent, to $13.60 in after-hours trading after the deal was announced. The stock has traded in a 52-week range of $8.70 to $11.45. East West Bancorp shares slipped a penny to $30.13 after hours. Its shares lost 33 cents to close regular trading at $30.14 amid a broader market uptick.



Tags: metrocorp, shares, based, billion, bancorp, share,

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