On
December 23, 2005, East West Bancorp, Inc., a California corporation
(“East West
Bancorp”), its wholly owned subsidiary, East West Bank, a California state
bank
(“East West Bank”), and Standard Bank, a federal savings bank (“Standard Bank”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant
to which Standard Bank will merge with and into East West Bank,
with East West
Bank as the surviving bank (the “Merger”).
The
consideration to be paid in the Merger, approximately $204 million,
is a
combination of cash and stock equal to 2 times Standard Bank’s shareholders’
equity on September 30, 2005, subject to certain adjustments (the
“Merger
Consideration”). The shareholders of Standard Bank will receive a minimum of
65%
and up to 100% of the Merger Consideration in shares of East West
Bancorp common
stock. Each shareholder will have the option to receive up to 100%
of the
consideration in shares or in cash, or in a combination of shares
and cash. The
combination of cash and stock will be prorated if Standard Bank’s shareholders
elect to receive more than 35% of the total Merger Consideration
in
cash.
The
Merger Agreement contains customary representations and warranties
of the
parties and customary covenants, including a covenant on the part
of Standard
Bank not to solicit, provide confidential information with respect
to, recommend
to shareholders, or otherwise encourage competing acquisition proposals.
Consummation
of the Merger is conditioned upon, among other things, (i) regulatory
approval,
(ii) the absence of any laws or other similar orders prohibiting
the
consummation of the Merger, (iii) the accuracy of the representations
and
warranties and the fulfillment of all covenants contained in the
Merger
Agreement, and (iv) each party having performed all of its obligations
under the
Merger Agreement. Consummation of the merger is also conditioned
upon approval
of the outstanding shares of Standard Bank. The directors of Standard
Bank have
agreed with East West Bancorp in their capacity as shareholders
to vote in favor
of the Merger. In addition, the Board of Standard Bank has agreed
to recommend
the merger for approval by the shareholders.
The
Merger Agreement may be terminated if, among other things, (i)
the parties
mutually agree to such termination, (ii) regulatory approval and
the approval of
Standard Bank’s shareholders are not received, (iii) the Merger is not
consummated by June 30, 2006, (iv) either party breaches, without
cure, any
representation or warranty contained in the Merger Agreement that,
individually
or in the aggregate, has a material adverse effect on the breaching
party, or
(v) either party materially breaches, without cure, a covenant
or agreement
contained in the Merger Agreement.
The
Merger will be completed as soon as is practicable after all regulatory
approvals have been obtained and all other conditions in the Merger
Agreement
have been satisfied or waived.
This
description of the Merger and the Merger Agreement is a summary
only and is
qualified by reference to the full text of the Merger Agreement
which shall be
filed with East West Bancorp’s annual report on Form 10-K for the fiscal year
2005.
On
December 28, 2005, East West Bancorp issued a press release announcing
the
execution of the Merger Agreement. A copy of the press release
is attached to
this current report on Form 8-K as Exhibit 99.1 and incorporated
herein by
reference.