Riggs, PNC May Merge After All

In the end, it looks like Riggs blinked.PNC Financial Services Group has agreed to buy Riggs Bank for $20 a share, or $652 million, reviving a deal that fell apart last week.The prize is substantially lower than the one the two companies agreed to in July, but more than the $19.32 a share PNC offered last week and which Riggs’s board unanimously rejected.Washington, D.C.-based Riggs has also dropped a lawsuit it filed earlier this week after Pittsburgh-based PNC tried to back out of the original deal.“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 the chairman and chief executive officer of The PNC Financial Services Group, James E. Rohr, in a statement. “We have assessed the remaining risks to Riggs, and we believe we have reached a revised agreement that is fair to all parties.”On July 16, PNC agreed to acquire Riggs for $24.25 a share, or $779 million. The deal was thrown into question when Riggs on January 27 pleaded guilty to hiding transfers of millions of dollars in accounts held by former Chilean dictator Augusto Pinochet and top officials of Equatorial Guinea, and agreed to pay a $16 million fine.The criminal penalties came on top of a $25 million civil fine levied against Riggs for its dealing with the embassies of Saudi Arabia and Equatorial Guinea.Also, Riggs reported earlier this week that it lost $100 million in 2004.Under the new agreement, PNC will pay Riggs shareholders 6.4 million shares of PNC common stock and $286 million in cash in exchange for all 31.8 million Riggs common shares outstanding. “Clearly the condition of the company [Riggs] deteriorated from the day the [July] agreement was signed until today,” said an analyst with RBC Capital in Portland, Maine, Gerard Cassidy.

Riggs, PNC May Merge After All

Riggs, PNC May Merge After All

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