PNC to Buy Riggs Bank for $779 Million [View All]

[seemslikeadream]

Fri Jul 16, 2004 09:15 AM ET

PHILADELPHIA (Reuters) - PNC Financial Services Group Inc. (PNC.N: Quote, Profile, Research) on Friday said it would buy troubled Riggs National Corp. (RIGS.O: Quote, Profile, Research) for $779 million, giving the Pittsburgh bank a foothold in the Washington, D.C. market.
Riggs, which recently agreed to pay a $25 million fine amid allegations of possible violations of U.S. money laundering laws, provides commercial and retail banking services at 50 branches in metropolitan Washington.

All existing Riggs branches will assume the PNC Bank name, wiping away a 165-year-old moniker that has been known as the banker to presidents and diplomats in Washington. PNC said it expects to open additional branches in that area.

PNC will pay $24.25 a share, or about $779 million in stock and cash for Riggs. The price is a 7 percent premium over Riggs' closing stock price of $22.67 on Thursday
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http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5692011

PNC Financial to buy Riggs National for $779M (8:27 AM ET) NEW YORK (CBS.MW) -- PNC Financial Services Group(PNC)and Riggs National Corp.(RIGS)announced a definitive pact for PNC to acquire Riggs in an exchange of cash and stock valued at $779 million, or $24.25 per Riggs share. PNC expects the transaction will add to earnings per share in 2007 and that it has an estimated internal rate of return exceeding 16 percent. Total consideration will be comprised of a fixed number of about 7.5 million PNC shares and $321 million in cash, subject to adjustment. Riggs shareholders may elect to receive PNC stock or cash, subject to proration. The deal is expected to close in the first quarter of 2005. Separately, PNC said it expects to report second-quarter earnings of $304 million, or $1.07 per share. The average estimate of analysts polled by Thomson First Call is for earnings of $1.01 for the quarter. PNC said the results were driven by improvements in noninterest income and lower credit costs.
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