Merrill Lynch has entered a definitive agreement with First Republic Bank to acquire all of FirstRepublic’s outstanding common shares in exchange for cash and stock valued at a fixed price of $55.00 per share or a total of $1.8 billion.
The transaction will be completed during the third quarter of 2007, pending regulatory approval and approval by FirstRepublic shareholders. FirstRepublic will continue operating its private banking and wealth management firm as a separate division of Merrill Lynch Bank & Trust Co. It will retain its name, current management, its San Francisco headquarters, and clients.
Jim Herbert, chairman and CEO and Katherine August-deWilde, COO will continue their leadership positions. FirstRepublic’s board of directors will serve as the division’s Advisory Board, which will be chaired by the current chairman, Roger Walther.
“We are very pleased that First Republic will join Merrill Lynch as a separately run business that will enable us to enhance the growth of our private client organization by leveraging First Republic’s very successful business model and strategy,” says Robert J. McCann, president of Merrill Lynch’s Global Private Client business.
“FirstRepublic will enable Merrill Lynch to accelerate its strategic objective of growing its high net worth business. Our goal is to provide FirstRepublic with the resources and support to replicate the firm’s success in key markets across the country and to benefit from its deep banking expertise. We look forward to supporting FirstRepublic’s further expansion with additional capital and a greater range of investment products, advice and services. While FirstRepublic will operate as a separate division with its own brand identity and strategic goals, we expect our entire private client organization to benefit from its outstanding history, excellent credit and lending capabilities, and its experienced management team. FirstRepublic’s strong culture of client focus and service sets the standard for excellence in the private banking industry and is consistent with Merrill Lynch’s mission and principles.”
FirstRepublic provides services which include private banking, private business banking, real estate lending, trust, brokerage and investment management, with a specialisation in luxury home lending.
“We are pleased with the value that this transaction will create for our shareholders,” says Herbert, the founding president, CEO and director of FirstRepublic. “We are especially excited about all of the benefits that our partnership with Merrill Lynch will bring for our clients and the fact that FirstRepublic will continue to operate as it has – with complete focus on delivering exceptional service to clients. With Merrill Lynch, we will be able to further grow FirstRepublic and offer even more world-class wealth management products and services. For employees, our partnership with Merrill Lynch will provide more opportunities to serve their clients, offer additional professional growth opportunities and offer the chance to work with the best wealth management firm in the industry.”