Old National Bancorp buys Monroe Bancorp in all-stock deal valued at $83.5 million

By AP
Wednesday, October 6, 2010

Old National buys Monroe Bancorp for $83.5 million

EVANSVILLE, Ind. — Old National Bancorp said Wednesday it will buy Monroe Bancorp of Bloomington, Ind., in an all-stock deal valued at $83.5 million.

Old National will add Monroe’s 15 banking centers to its network of 165 branches in Indiana, Illinois and Kentucky.

The deal, approved by both company’s boards, calls for Monroe shareholders to receive 1.275 shares of Old National for each share they hold.

Sterne, Agee & Leach analyst Kenneth James said the deal values Monroe shares at $13.35 per share, a 148 percent premium to its Tuesday closing stock price of $5.38.

With the acquisition, Old National will increase its market position in Bloomington to roughly 30 percent, James said, making it the number one bank in the city. “We view the deal positively from a strategic perspective given the increased market share in a core Indiana market and the meaningful cost saves the in-market transaction should produce,” James said in a note to clients.

It is expected to close by the end of the year or in early 2011, subject to approval by regulators and Monroe shareholders.

Monroe shares soared on the news, gaining $5.87 to close Wednesday at $11.25, after earlier trading at a new high of $11.98. Volume was more than 80 times the daily average for the usually lightly traded bank.

Old National shares slipped 37 cents, or 3.5 percent, to close at $10.10.

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