One of the largest banks in North Carolina has had its offer to purchase a small bank in Smithfield, North Carolina, rebuffed Thursday by the board of directors of the smaller entity, according to a Securities and Exchange Commission filing.
First Citizens BancShares Inc., which is based in Raleigh, proposed acquiring KS Bancorp Inc. for $35 per share in cash, in a transaction valued at approximately $45.8 million.
But KS Bancorp’s board rejected the offer, according to a letter First Citizens sent to its board.
“Our objective is to engage in substantive discussions with KS Bancorp and conduct customary due diligence so that we and KS Bancorp can together quickly bring this compelling transaction to KS Bancorp’s shareholders,” said Frank B. Holding Jr., chairman and chief executive officer of First Citizens.
The offer represents 49.6 percent premium over KS Bancorp’s closing trading price on July 12 and a 84 percent premium over KS Bancorp’s book value per share as of March 31.
First Citizens said it made its proposal public in order to inform KS Bancorp’s shareholders of the offer. The letter, written by Chief Financial Office Craig Nix, stated, “We believe that your shareholders will emphatically support the board’s entering into a constructive and professional dialogue with us.”
KS Bancorp was founded in 1924 and has nine branch offices in Kenly, Goldsboro, Wilson, Garner, Selma, Clayton, Wendell, Four Oaks and Smithfield, North Carolina, as well as a mortgage origination office in Greenville. It has assets of $368 million.
Its shares closed Thursday at $31.27, up $7.87, or 33.6 percent.
First Citizens saw its shares close at $383, up 83 cents, on Thursday. It has more than 560 branches in 23 states and more than $34 billion in assets.
It was founded in 1898 as the Bank of Smithfield in Johnston County.