May 4, 2007

Wells Fargo to Buy Greater Bay Bancorp

Today, Greater Bay Bancorp announced that they will be aquired by Wells Fargo Bank - pending board approval on both sides. I copied the article from today's Wall Street Journal below.

Wells Fargo Agrees to Acquire
Greater Bay Bancorp for $1.5 Billion

May 4, 2007 9:15 a.m.

Wells Fargo & Co. Friday said it agreed to acquire Greater Bay Bancorp, a bank-holding company in the San Francisco Bay area, in a stock deal the companies valued at roughly $1.5 billion.

The deal targets Greater Bay's stock price at $28.50 a share. That is actually a discount to Thursday's closing price of $29.54. However, Greater Bay's stock price rose 11.6%, or $3.08, in Thursday trading, ahead of the merger announcement.

In recent pre-market trading, Greater Bay shares were at $28.20. Wells shares were unchanged at $35.84.

Greater Bay, East Palo Alto, Calif., has $7.4 billion in assets and more than 1,800 employees. It has 41 banking locations in the San Francisco Bay area under such names such as Mid-Peninsula Bank, Bank of Petaluma, Golden Gate Bank, Coast Commercial Bank, Peninsula Bank of Commerce, Mount Diablo National Bank, and Santa Clara Valley National Bank.

Greater Bay also owns ABD Insurance and Financial Services, an insurance broker with locations on the West Coast, and Matsco Financial Corp., a national lender primarily to veterinarians and dentists.

Under the agreement, expected to close in the fourth quarter, Greater Bay shareholders will receive an amount of Wells shares based on Wells's stock price. The measurement price will equal the average price of a Wells share for the 10 trading days preceding Greater Bay's shareholder meeting, at which Greater Bay holders will vote on the transaction.

If the Wells measurement price is greater than $32.175 and less than $39.325, the exchange ratio will be determined by dividing $28.50 by the measurement price, the companies said.

If the Wells measurement price is equal to or less than $32.175, then the exchange ratio will be 0.8858. If the Wells measurement price is greater than or equal to $39.325, then the exchange ratio will be 0.7247.

Assuming a Wells measurement price between $32.175 and $39.325, the total value of the transaction would be approximately $1.5 billion, based on Greater Bay's shares on a fully diluted basis, the companies said.

San Francisco-based Wells, a diversified financial services company, has assets of $486 billion. It provides banking, insurance, investments, mortgage and consumer finance through more than 6,000 locations and its Web site across North America and internationally.

Separately, Greater Bay posted first-quarter net income of $17.8 million, or 31 cents a share, compared with $26.2 million, or 46 cents a share, a year earlier.

The latest results included professional-servcies expenses of $1.5 million for strategic planning and $700,000 of pension-related expenses. First-quarter results also included $1.4 million in compensation expense, related to prior periods, and $400,000 in tax expense. The expenses were offset by a $1.5 million mark-to-market gain in the value of the company's venture capital and equity securities.

Analysts surveyed by Thomson Financial were looking for first-quarter earnings, excluding items, of 39 cents a share.

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