Hilltop Holdings, PlainsCapital Corp. Sign Merger Agreement

Hilltop Holdings Inc. a Dallas-based holding company that through a subsidiary provides fire and homeowners insurance to low value dwellings and manufactured homes, and Dallas-based PlainsCapital Corp., the financial services holding company for PlainsCapital Bank, PrimeLending and FirstSouthwest have agreed to merge.

Under the terms of the agreement, PlainsCapital Corp. will become a subsidiary of Hilltop.

The purchase consideration to PlainsCapital common shareholders includes approximately 27.5 million shares of Hilltop common stock and $318 million of cash. Each share of PlainsCapital common stock will be converted into the right to receive $9.00 in cash and 0.776 shares of Hilltop common stock.

Based on Hilltop’s closing market price of $7.96 as of May 8, 2012, this reflects a combined value of $15.18 per share for PlainsCapital Corp. common stock. The value of the stock consideration to be received in the merger will fluctuate based on the market share price of Hilltop common stock.

The merger is expected to be completed prior to the end of 2012.

As part of the agreement, PlainsCapital Corp. Chairman and CEO Alan B. White will become vice chairman of Hilltop and chairman of the executive committee for Hilltop. White will also retain his role as chairman and CEO of PlainsCapital Corp.

Gerald J. Ford will continue to serve as chairman of Hilltop’s board and Jeremy B. Ford will continue to serve as president and CEO of Hilltop.

Hilltop is a holding company that is endeavoring to make acquisitions and effect a business combination. As of March 31, 2012, Hilltop had approximately $528 million aggregate available cash that may be used for this purpose. Hilltop provides fire and homeowners insurance to low value dwellings and manufactured homes primarily in Texas and other areas of the south through its wholly-owned property and casualty insurance subsidiary, NLASCO Inc.

Topics Mergers & Acquisitions