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Looking to expand its banking business in the Windy City, MB Financial (NASDAQ: MBFI ) jointly announced with Taylor Capital (NASDAQ: TAYC ) that it was buying the holding company of Cole Taylor Bank, a Chicago-based commercial bank with $5.9 billion in assets, $3.3 billion in loans, and $3.7 billion in deposits.
The acquisition of Taylor's nine branches for approximately $680 million will nearly double MB Financial's middle market commercial banking market share in the Chicago area, which has 85 Chicago-area branches.
Noting the combined bank is expected to have a top-10 deposit market share ranking in the Chicago region, and top-five deposit market share ranking in Cook County itself, MB Financial President and CEO Mitchell Feiger commented that the merger makes "a terrific strategic transaction."
MB's offer for Taylor is $22 per share, a 23% premium to Taylor Capital's closing price last Friday. Upon completion of the merger, each share of Taylor Capital's common stock and nonvoting preferred stock will be converted into 0.64318 shares of MB Financial common stock, and $4.08 in cash, an 81% to 19% mix of stock and cash.
Before the deal can go through, however, it still has to be approved by regulators, and the shareholders of both financial institutions, so the transaction is not expected to close before the first half of 2014.
The Securities division of JPMorgan Chase is acting as financial advisor to MB Financial, and Silver, Freedman & Taff is serving as its legal counsel. Taylor Capital is being advised by Sandler O'Neill & Partners, and Barack Ferrazzano Kirschbaum & Nagelberg is acting as its legal counsel.