WaFd's deal with EverBank Financial is structured so EverBank's shareholders end up in control, an unusual twist for a combination between a public bank and a private one.
WaFd, Inc. and privately held EverBank Financial Corp announced a definitive merger agreement Sunday valued at roughly $3.9 billion, structured as a reverse merger in which EverBank shareholders will end up controlling the combined company. WaFd's own shareholders are set to retain about 40.8% of the combined entity, even though the deal uses WaFd's Nasdaq listing as the vehicle for the transaction.
Management has pegged the deal's expected earnings accretion at roughly 29%, a figure drawn from deal materials that has not been independently verified. The combined company may take a new name and ticker, EVBK, though that detail remains unconfirmed pending WaFd's own regulatory filing.
The structure itself is the story. Most bank mergers run the conventional direction: a public acquirer pays a premium to absorb a smaller target, and the acquirer's shareholders keep control. Here, the nominal acquirer is left with a minority stake in the company that bears its own name and trades under its own ticker, at least for now, while the private company's shareholders take the larger share of the combined entity. Whether that reflects a genuine control transaction, EverBank effectively going public through WaFd's own listing at WaFd shareholders' expense, or a merger-of-equals-style combination that happens to net out close to that split, depends on details WaFd's regulatory filing has not yet made public.
Today's session is the first test of how the market prices the transaction. The regulatory approval path for a bank-holding-company combination of this size, and the exact terms buried in the merger agreement itself, are the two details most likely to determine whether investors treat this as a fair combination or a discount sale dressed up as a merger.