Southeast Banking Corp. of Miami took action yesterday to block Chemical New York Corp., the country's sixth-largest bank, from entering the Florida market.
Southeast, the state's largest bank holding company, petitioned the Federal Reserve and the Florida state comptroller's office to stop Chemical from making an equity investment in and an ultimate merger with Florida National Banks of Florida Inc. Chemical has plans to invest about $70 million immediately and $300 million eventually in Florida National. Florida National earlier had rejected Southeast's takeover bid of $32 a share.
Current federal law prohibits bank holding companies from making acquisitions or opening branches across state lines; however, a number of large banks are making contingent deals in the expectation that the law will be changed in a few years.
In an accompanying statement, Southeast President Charles J. Zwick said, "If these cease-and-desist petitions are not implemented, other money-center bank holding companies may perceive this transaction as an official signal to commence acquisitions of regional banks and bank holding companies prior to appropriate congressional consideration and authorization of interstate banking."
Southeast feels that Chemical's action could tie up the shareholders for a long time until the law is changed, preventing other bidders from making better offers. Chemical has pledged to pay a minimum of $38 per share.
Both Chemical and Florida National issued statements late yesterday saying their agreement was in the best interest of the shareholders of both banks.