Capital Bank's Stock Slumps After Buyout Deal Values Regional Bank At a Discount

By Tomi KilgoreMarketsMarketWatch Pulse

Shares of Capital Bank Financial Corp. slumped 4.9% in premarket trade Thursday, as terms of the $2.2 billion buyout deal with First Horizon National Corp. valued Capital Bank at a discount. First Horizon will exchange 1.750 of its shares and $7.90 in cash for each Capital Bank share outstanding. Based on Wednesday's closing prices, that values Capital Bank shares at $40.835 each, which is 2.9% below Wednesday's closing price of $42.05. The merger is expected to close in the fourth quarter. The banks said the merger will create the fourth-largest regional bank in the Southeast. Capital Bank's stock had gained 7.1% year to date through Wednesday, while First Horizon shares fell 6%, the iShares U.S. Regional Banks ETF slipped 0.5% and the S&P 500 gained 6.7%.

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