Hanmi Bank parent Hanmi Financial Corp. announced Thursday it has dropped its bid to merge with fellow Korean-American bank BBCN Bancorp Inc., apparently ending a tug-of-war for dominance of the Koreatown banking market.
The news came on the heels of BBCN’s announcement last week that it would consummate previously disclosed merger talks with Wilshire Bancorp Inc., forming the largest Korean-American bank in the United States with $12.3 billion in assets. All three banks are headquartered in Koreatown.
“While we strongly believe that Hanmi's proposal was superior to BBCN's announced agreement with Wilshire, as a disciplined acquirer, we have concluded that, at this time, continued pursuit of a combination with BBCN is not in the best interests of our stockholders,” wrote Hanmi’s directors in a statement. “We came to this determination after taking into consideration BBCN's decision to enter into an inferior agreement with Wilshire without ever engaging in discussions with Hanmi regarding our premium proposal.”
Hanmi’s board added that the Wilshire agreement’s $40 million break-up fee became a liability, as it would’ve effectively bumped up the cost of combining with BBCN by about 50 cents a share.
The board further claimed that its “superior capital and liquidity positions will also allow us to capitalize on the dislocation that the announced BBCN-Wilshire combination is creating.”
Executives from BBCN and Wilshire were not immediately available for comment.
Hanmi, which is the third largest Korean-American bank in Los Angeles County, had previously made public its dismay at not having been tapped as a possible BBCN suitor prior to that bank and Wilshire entering into serious merger talks. BBCN is Los Angeles’s largest Korean-American bank and Wilshire is the second largest.