Newmil Bancorp (NASDAQ:NMIL)
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Webster Financial Corporation (NYSE: WBS), the holding
company for Webster Bank, N.A., today announced that it has reached a
definitive agreement to acquire NewMil Bancorp, Inc. (NASDAQ: NMIL),
headquartered in New Milford, Connecticut. NewMil Bancorp is the
holding company for NewMil Bank, a state-chartered savings bank with
$873 million in assets at December 31, 2005 and 20 branches in
Connecticut.
Under the terms of the agreement, Webster Financial Corporation
will acquire NewMil Bancorp through a tax-deferred, stock-for-stock
exchange of all of the outstanding shares of NewMil Bancorp's common
stock. NewMil Bancorp shareholders will receive $41.00 in Webster
common stock for each share of NewMil Bancorp common stock so long as
Webster's average stock price (as defined in the agreement) is between
$44.85 and $50.25 per share. If the average Webster stock price is
below $44.85, the exchange ratio will be fixed at .9142. If the
average Webster stock price is above $50.25, the exchange ratio will
be fixed at .8159. Based on Webster's closing stock price on April 24,
2006, the transaction has an aggregate value of approximately $172.5
million.
"Our partnership with NewMil Bancorp is a combination of
like-minded institutions that share a vision to be the region's
leading financial service provider," stated Webster chairman and chief
executive officer James C. Smith. "This alliance unites us with our
highly respected partner while deepening Webster's presence in
Litchfield, New Haven and Fairfield Counties. We know well
Connecticut's markets and customers."
NewMil Bank and Webster Bank will merge operations, and existing
NewMil Bank branches will be renamed as branches of Webster Bank.
NewMil chairman, president and chief executive officer Francis J.
Wiatr said, "This agreement creates significant value for NewMil's
shareholders, customers and the communities we serve. In joining with
Webster, we are strengthening a powerful regional franchise that has
become the largest independent bank headquartered in New England. This
partnership will provide our customers access to a broader array of
financial services from the same employees they've come to know and
trust."
As part of the transaction, Webster plans to repurchase in open
market transactions up to 20% of the deal value, which results in
marginal accretion to its diluted GAAP earnings per share in 2007.
The closing of the transaction, which is subject to customary
closing conditions, including approval of regulatory authorities and
NewMil Bancorp's shareholders, is expected to occur in the fourth
quarter of 2006.
After the merger, NewMil's board of directors will serve as an
advisory board to Webster Bank, with Francis J. Wiatr serving as its
chairman.
MG Advisors, Inc. and Keefe, Bruyette & Woods, Inc. served as
financial advisors to NewMil Bancorp.
Webster Financial Corporation is the holding company for Webster
Bank, National Association and Webster Insurance. With $17.9 billion
in assets, Webster provides business and consumer banking, mortgage,
insurance, financial planning, trust and investment services through
158 banking offices, 306 ATMs, telephone banking and the Internet.
Webster Bank owns the asset-based lending firm Webster Business Credit
Corporation, the insurance premium finance company Budget Installment
Corp., Center Capital Corporation, an equipment finance company
headquartered in Farmington, Connecticut and provides health savings
account trustee and administrative services through HSA Bank, a
division of Webster Bank.
For more information about Webster, including past press releases
and the latest annual report, visit the Webster website at
www.websteronline.com.
NewMil Bancorp is the parent company of NewMil Bank, a full
service community bank headquartered in New Milford, Connecticut. The
Bank, which has served western Connecticut since 1858, operates 20
full-service banking branches throughout Litchfield, Fairfield and New
Haven Counties.
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
FOR SALE. THE OFFERING OF WEBSTER COMMON STOCK WILL BE MADE ONLY BY
MEANS OF A PROSPECTUS IN ACCORDANCE WITH FEDERAL LAW AND APPLICABLE
STATE SECURITIES LAWS. THIS PRESS RELEASE SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUT ANY SECURITIES.
Forward-Looking Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
regarding the benefits of the NewMil Bancorp acquisition, including
future business opportunities and financial results, and the
companies' intentions with respect to the combined company. These
forward-looking statements are based upon current beliefs and
expectations and are subject to business, economic and other
uncertainties and contingencies, many of which are beyond our control.
Actual results may differ materially from the anticipated results as a
result of various factors, including among others: (1) the failure to
successfully integrate the two companies' businesses, or to integrate
them in a timely manner; (2) the failure to achieve anticipated cost
savings, or to achieve such savings in a timely manner; (3) costs,
customer loss and business disruption in connection with the
acquisition or the integration of our companies may be greater than
expected; (4) failure to obtain governmental approvals without adverse
regulatory conditions; (5) difficulties associated with achieving
expected future financial results; and (6) failure of the NewMil
Bancorp stockholders to approve the acquisition. Additional factors
that could cause actual results to differ materially from those
expressed in the forward-looking statements, including those relating
to the businesses of Webster and NewMil generally, are discussed in
Webster's and NewMil's reports filed with the SEC (accessible on the
SEC website at http://www.sec.gov, on Webster's website at
http://websteronline.com and on NewMil's website at
http://www.newmil.com). Webster and NewMil do not undertake any
obligation to update any forward-looking statements to reflect changes
in beliefs, expectations or events.
Solicitation Information
The proposed transaction will be submitted to NewMil Bancorp
stockholders for their consideration. Webster and NewMil will file
with the SEC a registration statement, a proxy statement/prospectus
and other relevant documents concerning the proposed transaction with
the SEC. Stockholders of NewMil are urged to read the registration
statement and the proxy statement/prospectus when it becomes available
and any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they will
contain important information. You will be able to obtain a free copy
of the proxy statement/prospectus, as well as other filings containing
information about Webster and NewMil at the SEC's Internet site
(http://www.sec.gov). Copies of the proxy statement/prospectus and the
SEC filings that will be incorporated by reference in the proxy
statement/prospectus can be obtained, without charge, by directing a
request to Terrence K. Mangan, Senior Vice President/Investor
Relations, Webster Financial Corporation, Webster Plaza, Waterbury, CT
06702 (203) 578-2318 or to B. Ian McMahon, Executive Vice President
and CFO, NewMil Bancorp, PO Box 600, New Milford, CT 06776-0600
860-355-7630.
NewMil and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from the stockholders
of NewMil in connection with the proposed merger. Information about
the directors and executive officers of NewMil and their ownership of
NewMil Bancorp common stock is set forth in the proxy statement, dated
March 24, 2006, for NewMil's 2006 annual meeting of stockholders, as
filed with the SEC on Schedule 14A. Additional information regarding
the interests of such participants may be obtained by reading the
proxy statement/prospectus when it becomes available.
For more investor relations information, please visit
www.wbst.com.