Colonial BancGroup has signed a definitive agreement with investors led by Taylor, Bean & Whitaker Mortgage for a $300m equity investment in Colonial.
The closing of the investment is subject to certain conditions being met and the approval of the bank regulatory authorities.
It is anticipated that Colonial will continue to operate as a stand-alone publicly traded company with an independent board of directors and management team. Following completion of the transaction, on an as-converted basis, the investors led by Taylor, Bean & Whitaker Mortgage Company (collectively referred to as the investors) will own approximately 75% of Colonial’s common stock outstanding.
Under the terms of the agreement which was approved by the board of directors of Colonial, the investors will purchase 466,600 shares of contingently convertible voting preference stock (series A stock) and 133,400 shares of contingently convertible non-voting preference stock (series B stock) at a price of $500 per share for an aggregate purchase price of $300m.
Upon closing, the Colonial board of directors will be fixed at 15 members of whom five will be selected by the investors as provided in the agreement. Within 60 days of closing, the board of directors will consist of five continuing members, the five members as selected by the investors and five other members mutually agreeable to Colonial and the investors.
