RBC Centura, an auxiliary of Royal Bank of Canada (RBC) says it has agreed a deal to buy Alabama National BanCorporation, in a contract deal worth $1.6 billion, Reuters reports.
Alabama National shareholders will have a choice of $80 per share in cash, shares in RBC, or a mix of both.
The offer price is a 50.6 percent premium to Alabama National’s closing share price of $53.12 on Wednesday.
The deal follows moves by RBC to add to its US assets, having previously bought Raleigh in 2001 for $2.3 billion, and will improve the presence of RBC in the south-east of the US.
There was a notable 45 per cent hike in Alabama National shares on Thursday morning, leaving them at a price of $77.
“If you’re going to pick up anywhere in the US to grow, it would the south-east, because it’s showing the most growth in terms of population,” says Al Savastano, an analyst at Fox-Pitt Kelton in New York.