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Peoples Bancorp Shares Plummet on Acquisition News
1 Oct
Summary
- Peoples Bancorp agrees to acquire Capital Bancorp in all-stock deal.
- Deal valued at over $728 million, with significant share dilution expected.
- Investors reacted negatively, causing Peoples Bancorp stock to drop nearly 6%.
Peoples Bancorp (NASDAQ: PEBO) announced an agreement to acquire Capital Bancorp in an all-stock transaction valued at over $728 million. Capital Bancorp shareholders will receive 1.11 shares of Peoples for each Capital share they own.
The merger is projected to create an entity with around $14 billion in total assets, $10 billion in outstanding loans, and $11 billion in customer deposits. The combined bank will operate more than 150 branches across eight states and the District of Columbia.
Investors expressed strong disapproval of the acquisition, driving Peoples Bancorp's stock down by nearly 6% on Wednesday. A primary concern is the issuance of over 18 million new Peoples shares, representing more than a 50% increase in its current share count, leading to anticipated dilution.
The acquisition is expected to be immediately accretive to Peoples' 2027 earnings before one-time costs. The deal's closure is anticipated in the first half of 2027, pending shareholder and regulatory approvals from both companies.
