PNC Will Acquire Riggs Bank for $652M

Thursday, February 10th 2005, 12:32 pm
By: News On 6

PITTSBURGH (AP) _ PNC Financial Services Group Inc. agreed to buy Riggs Bank for $652 million, salvaging a deal that appeared scuttled last week, company officials said Thursday.

PNC has agreed to a sale price of $20 per share, far less than the price announced last summer before Riggs ran into regulatory trouble, but well above the $19.32 revised offer unanimously rejected by Riggs last week.

The deal, approved by boards at both companies, is expected to be closed ``as soon as possible,'' said Mark Hendrix, Riggs spokesman.

Riggs had sued PNC for trying to back out of the deal soon after Riggs pleaded guilty to violations of a law to prevent money laundering.

PNC will pay Riggs shareholders 6.4 million common shares and $286 million in cash in exchange for all 31.8 million Riggs common shares outstanding. Riggs stock options, currently valued at $16 million, will be cashed out prior to closing, if not exercised. The deal was worth $652 million at the close of the market Monday, when PNC shares closed at $54.58, the companies said. It has since shrunk to about $644 million at recent prices.

PNC had agreed in July to pay $24.25 a share, or a total of about $779 million in cash and stock, for Riggs, an old-line Washington institution that had a near-monopoly on business with the capital's diplomatic community.

``We are looking forward to our entry into the extremely appealing Washington, D.C. marketplace, and we are confident that the Riggs franchise will provide us with an excellent platform from which to grow,'' said James E. Rohr, chairman and chief executive officer of The PNC Financial Services Group. ``We have assessed the remaining risks to Riggs, and we believe we have reached a revised agreement that is fair to all parties.''

The deal is subject to regulatory approvals and the approval of Riggs shareholders.