The acquisition of Little Rock’s Delta Trust & Banking Corp. by Simmons First National Corp. of Pine Bluff was announced in March and should be completed by the end of the month. But the merger dance began three years ago.
Simmons was first approached in May 2011 as part of an outreach by Delta Trust to find a potential buyer. That search included a few Arkansas banking organizations and dozens of out-of-state financial companies.
Hired to contact would-be suitors on behalf of Delta Trust was Commerce Street Capital LLC of Dallas. A few lenders expressed some interest, but nothing substantive came out of the queries and talks.
Simmons said no thanks in June 2011.
Six months later, after Commerce Street called again, Simmons asked about buying Delta’s trust business and its four-branch network in southeast Arkansas — Hamburg, Parkdale, Wilmot and Eudora.
Delta said no thanks.
The trawling for suitors in 2012 resulted in one nibble but no catch.
Things changed in February 2013, when an investment group that included the Stephen LaFrance Sr. family made an all-cash offer.
The would-be deal would have expanded the LaFrance family’s existing stake in Delta Trust. It would also have brought in new shareholders such as Merritt Dyke, director at Dyke Industries; Walter “Skip” Ebel III, who heads the mergers and acquisitions section at Friday Eldredge & Clark law firm and was a counsel for LaFrance’s USA Drug and its affiliates; and Jeff Fox, founder of Circumference Group and former Alltel COO.
Working out the financial details to transform the letter of intent into a definitive agreement proved insurmountable.
One item cited as a deal-killer by insiders was the purchase of unexercised stock options and warrants. Most of those are held by French Hill, chairman and founding CEO of Delta Trust and now the Republican nominee for Congress from the 2nd District
Simmons didn’t blink at paying $2 million for all the options and warrants as part of its pending acquisition of Delta.
The LaFrance-led group wasn’t keen on paying premiums to management that oversaw operations that produced stock appreciation averaging less than 3 percent annually during its first 10 years. (Or so some insiders say, regarding the sometimes fractious negotiations that ended before May.)
The LaFrance group made an unsuccessful run at buying a majority interest in Delta Trust in November, too.
By August 2013, members of the Delta Trust board of directors were reaching out to Simmons again.
With George Makris installed as CEO-elect at Simmons, talks found momentum, and the possibility of Hill’s continued employment became part of the dialogue.
The courtship blossomed into mutual due diligence in February and a merger agreement announced publicly on March 24.
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