By Connor Hart
Fairstone Bank of Canada entered an agreement to buy Laurentian Bank of Canada for about 1.9 billion Canadian dollars ($1.36 billion), a deal which comes as the latter accelerates its shift toward a specialty commercial bank.
As part of that shift, Laurentian Bank will sell its retail and small and medium-sized enterprise, or SME, banking businesses to the National Bank of Canada.
The coordinated transactions reflect a shared commitment to supporting a strong and competitive Canadian banking system, Laurentian Bank said Tuesday.
Under its deal with Fairstone Bank, the bank will acquire all of Laurentian Bank's outstanding shares for C$40.50 each in cash. The price represents an approximately 20% premium to Laurentian Bank's closing price Monday, the company said.
The acquisition--which is subject to shareholder approval--would combine Fairstone Bank's commercial lending operations with Laurentian Bank's commercial specialization. This combination would leverage both organizations' expertise to strengthen capabilities and expand market presence, Laurentian Bank said.
Under the deal, Laurentian Bank will retain its brand identity and head office in Montreal, with Eric Provost continuing as CEO.
At the same time, Laurentian Bank entered a deal with National Bank to divest its retail and SME banking portfolios, as well as its syndicated loan portfolio.
These sales will position Laurentian Bank as a commercially oriented bank, it said, concentrating on commercial real estate lending, inventory and equipment financing, intermediary services and capital markets activities.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
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