Commerce Bancshares Announces Pricing of Depositary Share Offering Representing Interests in $150 Million of Preferred Stock and Entry Into Accelerated Share Repurchase Agreement
By a News Reporter-Staff News Editor at Investment Weekly News -- Commerce Bancshares, Inc. (NASDAQ: CBSH) ("Commerce") announced the pricing of a public offering of 6,000,000 depositary shares, each representing a 1/1000th interest in its 6.00% Series B non-cumulative perpetual preferred stock, which qualifies as Tier 1 capital. Purchasers of depositary shares will be entitled to all proportional rights and preferences of the Preferred Stock (including dividend, voting, redemption and liquidation rights). The Series B preferred stock has a liquidation preference of $25,000 per share (equivalent to $25.00 per depositary share), or $150 million in the aggregate. The offering is expected to close on June 19, 2014, subject to customary closing conditions.
Morgan Stanley & Co. LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC are acting as joint-book running managers for the offering.
Commerce intends to use the net proceeds from the offering and other available liquidity to repurchase $200 million of shares of its common stock pursuant to an accelerated share repurchase ("ASR") agreement it has entered into today with Morgan Stanley. Under the terms of the ASR agreement, Commerce will pay $200 million to Morgan Stanley on June 19, 2014 and in exchange will receive shares of its common stock, with the substantial majority of shares expected to be delivered on June 19, 2014 and any additional shares expected to be delivered upon completion of the program, expected to be within the next twelve months. The total number of shares that Commerce will receive and the total consideration paid ultimately will be determined based on the volume-weighted daily average price of its common stock during the repurchase program. The Company also increased the number of shares under its stock buyback program to 5,000,000 shares to accommodate this program.
Keywords for this news article include: Banking and Finance, Investment and Finance.
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