Item 8.01 Other Events.
On
Important information concerning the special meeting and the proposed Merger is set forth in the Joint Proxy Statement/Prospectus. The Joint Proxy Statement/Prospectus is amended and supplemented by, and should be read as part of, and in conjunction with, the information set forth in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of the disclosures set forth herein.
The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Opinion of PMB's Financial Advisor-PMB Selected Companies Analysis" on page 69 by appending the following paragraph below the table:
The low and high stock price-to-tangible book value per share multiples of the selected companies in the "PMB Selected Companies Analysis" were 0.87x and 2.31x, respectively, and the low and high stock price-to-LTM EPS multiples of the selected companies (excluding the impact of the LTM EPS multiple for one of the selected companies, which multiple was considered to be not meaningful because it was greater than 30.0x) were 7.5x and 21.8x, respectively. For the 10 selected companies for which consensus "street estimates" were publicly available, the low and high stock price-to-2021 estimated EPS multiples of the selected companies were 7.8x and 20.4x, respectively, and the low and high stock price-to-2022 estimated EPS multiples of the selected companies were 7.8x and 20.3x, respectively.
The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Opinion of PMB's Financial Advisor-BOC Selected Companies Analysis" on page 70 by appending the following paragraph below the table:
The low and high stock price-to-tangible book value per share multiples of the selected companies in the "BOC Selected Companies Analysis" were 0.99x and 10.67x, respectively, the low and high stock price-to-LTM EPS multiples of the selected companies (excluding the impact of the LTM EPS multiple for one of the selected companies, which multiple was considered to be not meaningful because it was greater than 30.0x) were 11.9x and 22.6x, respectively, the low and high stock price-to-2021 estimated EPS multiples of the selected companies (excluding the impact of the 2021 EPS multiple for one of the selected companies, which multiple was considered to be not meaningful because it was greater than 30.0x) were 9.1x and 21.9x, respectively, and the low and high stock price-to-2022 estimated EPS multiples of the selected companies (excluding the impact of the 2022 EPS multiple for one of the selected companies, which multiple was considered to be not meaningful because it was greater than 30.0x) were 7.8x and 22.6x, respectively.
The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Opinion of PMB's Financial Advisor-Selected Transaction Analysis" on page 71 by appending the following paragraph below the table:
The low and high transaction price-to-tangible book value multiples of the selected transactions in the "Selected Transactions Analysis" were 1.02x and 2.10x, respectively, the low and high transaction price-to-LTM EPS multiples of the selected transactions (excluding the impact of the LTM EPS multiple for one of the selected transactions, which multiple was considered to be not meaningful because it was negative) were 9.2x and 21.6x, respectively, and the low and high core deposit premiums of the selected transactions were 1.5% and 15.0%, respectively. For the nine selected transactions in which the acquired company was publicly traded, the low and high one-day market premiums of the selected transactions were (-17.1)% and 68.8%, respectively.
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The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Opinion of PMB's Financial Advisor-Financial Impact Analysis" on page 72 by amending and restating the second and third to last sentences of the paragraph as follows:
This analysis indicated the merger could be accretive to BOC's estimated 2021
EPS and estimated 2022 EPS by approximately 3.2% and 12.9%, respectively, and
could be dilutive to BOC's estimated tangible book value per share at closing as
of
The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Opinion of PMB's Financial Advisor - PMB Dividend Discount Model Analysis / BOC Dividend Discount Model Analysis / Pro Forma Dividend Discount Model Analysis" on page 73 by expanding the existing disclosure regarding discount rates as follows:
The ranges of discount rates assumed in the dividend discount model analyses were selected taking into account capital asset pricing model implied cost of capital calculations.
The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Opinion of PMB's Financial Advisor-Miscellaneous" on page 73 by adding the following sentence at the end of the second paragraph:
In connection with (i) BOC's
The following disclosure is hereby added as a new section of the Joint Proxy Statement/Prospectus entitled "The Merger-Certain Unaudited Prospective Financial Information Regarding PMB and BOC Utilized by PMB's Board of Directors and PMB's Financial Advisor" on page 74 immediately following the section entitled "The Merger-Opinion of PMB's Financial Advisor."
Certain Unaudited Prospective Financial Information Regarding PMB and BOC Utilized by PMB's Board of Directors and PMB's Financial Advisor
PMB and BOC do not, as a matter of course, publicly disclose forecasts or
internal projections as to future performance, earnings, or other results due
to, among other reasons, the inherent uncertainty of the underlying assumptions
and estimates, the risk that they will prove incorrect and the inherent
difficulty of accurately predicting financial performance for future periods.
However, in connection with the merger, PMB's and BOC's respective managements
provided PMB's financial advisor, KBW, with certain non-public unaudited
prospective financial information regarding PMB and BOC, on a stand-alone basis,
respectively, that was utilized in the financial analyses performed by KBW in
connection with its opinion to PMB's board of directors, as described in this
joint proxy statement/prospectus under the heading "-Opinion of PMB's Financial
Advisor". The non-public unaudited prospective financial information provided by
PMB's and BOC's respective managements was prepared as part of PMB's and BOC's
overall process of analyzing various strategic initiatives, and was not prepared
for the purposes of, or with a view toward, public disclosure or with a view
toward complying with the guidelines established by the
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Although presented with numeric specificity, the unaudited prospective financial information reflects numerous estimates and assumptions of PMB's and BOC's respective managements made at the time they were prepared. These and the other estimates and assumptions underlying the financial forecasts involve judgments with respect to, among other things, the future interest rate environment and other economic, competitive, regulatory, and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive, and regulatory uncertainties and contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the industry in which PMB and BOC operate, and the risks and uncertainties described under "Risk Factors", and "Cautionary Statement Regarding Forward-Looking Statements", all of which are difficult to predict and many of which are outside the control of PMB and BOC and will be beyond the control of the combined company. There can be no assurance that the underlying assumptions would prove to be accurate or that the projected results would be realized, and actual results could differ materially from those reflected in the financial forecasts, whether or not the merger is completed. Further, these assumptions and the financial forecasts may otherwise be affected by PMB's and BOC's ability to achieve its strategic goals, objectives and targets over the applicable periods and do not include all potential actions that management could or might have taken during these time periods.
The unaudited prospective financial information summarized in this section was prepared by and is the responsibility of the managements of PMB and BOC. No independent registered public accounting firm, including for the avoidance of doubt the independent registered public accounting firms of PMB or BOC, has examined, compiled, or otherwise performed any procedures with respect to the prospective financial information and, accordingly, no independent registered public accounting firm has expressed any opinion or given any other form of assurance with respect to such information or its achievability and no independent registered public accounting firm assumes any responsibility for the financial forecasts. Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date they were prepared.
In light of the foregoing, and taking into account that the special meetings
will be held several months after the unaudited prospective financial
information was prepared, as well as the uncertainties inherent in any
forecasted information, PMB shareholders and BOC stockholders are strongly
cautioned not to place unwarranted reliance on such information, and PMB and BOC
urge all PMB shareholders and BOC stockholders to review PMB's and BOC's most
recent
The following unaudited prospective financial information was discussed with KBW
by PMB management and used and relied upon by KBW at the direction of such
management: (1) publicly available consensus analyst earnings per share
estimates for PMB for the years ending
The following prospective financial information was discussed with KBW by BOC
management and used and relied upon by KBW based on such discussions and at the
direction of PMB management: (1) publicly available consensus analyst earnings
per share estimates for BOC for the years ending
You are strongly cautioned not to place undue reliance on the unaudited prospective financial information set forth above. The inclusion in this joint proxy statement/prospectus of the non-public unaudited prospective financial information above should not be regarded as a representation by PMB, BOC or their respective affiliates, advisors or representatives as to the ultimate future financial performance of PMB or BOC. The financial forecasts are not fact and should not be relied upon as being necessarily indicative of actual future results, and this information should not be relied on as such. In addition, this information represents PMB and BOC respective managements' evaluation at the time it was prepared of certain measures of PMB's and BOC's, as the case may be, expected future financial performance on a stand-alone basis, assuming execution of certain strategic initiatives. The unaudited prospective financial information does not give effect to the merger, including the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, the potential synergies that may be achieved by the combined company as a result of the merger, the effect on either BOC or PMB, as applicable, of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but that were instead altered, accelerated, postponed, or not taken in anticipation of the merger.
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No assurances can be given that the unaudited prospective financial information and the underlying assumptions are reasonable or that, if it had been prepared as of the date of this joint proxy statement/prospectus, similar assumptions would be used. In addition, the unaudited prospective financial information may not reflect the manner in which BOC would operate the PMB business after the merger. PMB, BOC and their respective affiliates, advisors and representatives do not intend to, and each disclaims any obligation to, update or otherwise reconcile or revise the unaudited prospective financial information to reflect circumstances occurring since its preparation or to reflect the occurrence of future events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions.
Further, the unaudited prospective financial information does not take into account the effect on PMB or BOC of any possible failure of the merger to occur. None of PMB, BOC or their respective affiliates, advisors or representatives has made, makes, or is authorized in the future to make any representation to any shareholder of PMB or stockholder of BOC, or other person regarding the unaudited prospective financial information. The inclusion of the unaudited prospective financial information herein should not be deemed an admission or representation by BOC or PMB that such information is viewed as material information of PMB or BOC particularly in light of the inherent risks and uncertainties associated with such information. The unaudited prospective financial information is not being included in this joint proxy statement/prospectus to influence any shareholder's decision regarding how to vote on any given proposal to be voted on at the BOC or PMB special meetings, but because the unaudited prospective financial information was provided to PMB's financial advisor for purposes of the financial analyses performed by it as referred to under the heading "-Opinion of PMB's Financial Advisor".
The following disclosure amends and supplements the discussions in the section of the Joint Proxy Statement/Prospectus entitled "The Merger-Litigation Related to the Merger" on page 81 by amending and restating the entire paragraph as follows:
On
BOC has also received a demand letter from a purported shareholder that threatens legal action and similarly requests PMB to make additional disclosures. PMB has also received demand letters from purported shareholders, both from the above-captioned cases and others, which request additional disclosures from PMB and threaten legal action.
The Stein, Burke, Hopkins, and Parshall Complaints allege that PMB and its directors violated Section 14(a) of the Exchange Act, along with Rule 14a-9 promulgated thereunder, by filing the registration statement of which this document is a part, which allegedly contains false statements and omits material information intended to solicit shareholders to vote in favor of the merger.
The Hopkins Complaint is the only action that lists BOC as a defendant. Both the Stein and Burke Complaints also allege that PMB violated Section 20(a) of the Exchange Act, whereas the Hopkins Complaint only alleges that BOC and the members of PMB's board of directors, not PMB, violated Section 20(a) due to their positions as controlling persons over parties that allegedly knowingly violated Section 14(a), and are thus liable under Section 20(a). The Parshall Complaint only alleges that the members of PMB's board of directors violated Section 20(a). The Stein, Burke, Hopkins, and Parshall Complaints seek (1) injunctive relief preliminarily and permanently enjoining consummation of the merger, (2) rescission of the merger and an award of rescissory damages in the event the merger is consummated, (3) injunctive relief directing dissemination of a registration statement that does not contain any untrue statements of material fact and that states all material facts in it or necessary to make the statements contained therein not misleading, (4) a declaration that defendants violated Sections 14(a) and/or 20(a) of the Exchange Act, and (5) an award of costs incurred by plaintiff in bringing the lawsuit, including attorneys' and experts' fees. BOC and PMB believe the Stein, Burke, Hopkins and Parshall Complaints are without merit. At this stage, it is not possible to predict the outcome of the proceedings in the merger-related litigation or their impact on BOC, PMB or the merger.
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Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the
"Safe-Harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are necessarily subject to risk and uncertainty and
actual results could differ materially from those anticipated due to various
factors, including those set forth from time to time in the documents filed or
furnished by the Company and Pacific Mercantile with the
Additional Information About the Merger and Where to Find It
Investors and security holders are urged to carefully review and consider each
of the Company's and Pacific Mercantile's public filings with the
In addition to the registration statement and Joint Proxy Statement/Prospectus
filed by the Company, Pacific Mercantile filed a definitive proxy statement with
the
The Company, Pacific Mercantile, their directors, executive officers and certain
other persons may be deemed to be participants in the solicitation of proxies
from the Company and Pacific Mercantile shareholders in favor of the approval of
the transaction. Information about the directors and executive officers of the
Company and their ownership of Company common stock is set forth in the proxy
statement for the Company's 2021 annual meeting of stockholders, as previously
filed with the
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