Laurentian Bank of Canada (LB) has agreed to sell itself to privately held Fairstone Bank for $1.9 billion in cash.
As part of the deal, Laurentian Bank will sell its retail and small-and-medium-sized business banking portfolios, as well as its loans, to National Bank of Canada (NA).
In a news release, Laurentian Bank said that selling itself to Fairstone will allow it to grow its commercial business while maintaining its brand identity and head office in Montreal, Quebec.
Under terms of the deal, Laurentian Bank's branches and employees will remain inhouse and will not be transferred to National Bank or Fairstone.
Fairstone Bank will pay $40.50 in cash for each Laurentian Bank share, while the amount National Bank pays will be based on outstanding balances at closing.
The deal is subject to regulatory approval in Canada and a two-thirds majority vote by Laurentian Bank’s shareholders.
A closing date for the transaction has not been announced.
Laurentian Bank’s stock has risen 2% in the last five years to trade at $33.76 per share in Toronto.
