Business mergers and acquisitions happen all of the time. Depending on the size of the business and other business specific details, the planning that goes into mergers and acquisitions requires a lot of attention to detail and careful thought. Even though a lot of planning goes it these deals, no deal is truly final until it is signed.

American Perspective Bank and Pacific Western Bank have publicly announced a definitive agreement that provided for Pacific Western Bank’s merger to acquire American Perspective Bank’s outstanding common stock and restricted stock. The agreement was finalized for the amount of $58 million, in cash.

Previously, American Perspective Bank made a public statement it had a definitive agreement that provided for Umpqua Bank’s acquisition of the same terms for the amount of $44.7 million. Although the two agreements had essentially the same terms, the final amount differed because Pacific Western Bank paid $13.00 per share compared to Umpqua Bank’s offer at $10.00 per share.

Since American Perspective Bank had previously entered into an agreement with Umpqua Bank, there were clauses in the agreement that provided for the termination of the agreement. After Pacific Western Bank made its offer, the board of directors for American Perspective Bank had a fiduciary duty to make a decision that was most beneficial to the shareholders.

As provided in the agreement with Umpqua Bank, American Perspective Bank exercised its right to have discussions with Pacific Western Bank. Another provision in the agreement with Umpqua Bank was a termination provision, which stated if the agreement was terminated American Perspective Bank is obligated to pay a termination fee. The termination fee was $1.6 million, which is due within 30 days of the termination date.

Source: Market Watch, “Pacific Western Bank Signs Definitive Agreement To Acquire American Perspective Bank For $58.1 Million,” April 30, 2012