PNC Buying Riggs for $779M in Stock, Cash

PITTSBURGH-Locally based PNC Financial Services Group Inc. is acquiring Washington, DC-based Riggs National Corp. for $24.25 per common share, or approximately $779 million in stock and cash.Riggs is a $6-billion asset banking company that provides commercial and retail banking services through 50 branches in the metropolitan Washington, DC area, which is considered one of the nation’s most appealing financial services markets and the fifth-most affluent metropolitan region in the US. PNC operates businesses in regional community banking (PNC Bank), wholesale banking, wealth management, asset management and global fund processing.PNC president Joe Guyaux, who will oversee the integration process, says PNC is confident that it will successfully address Riggs’ regulatory problems. According to published reports, Riggs was fined recently $25 million by the federal government for violations related to its handling of banks accounts for Saudi diplomats, and earlier this week came under fire again after a congressional report suggested it had engaged in money-laundering transactions for former Chilean president Augusto Pinochet.The transaction is expected to result in the reduction of approximately $82 million of operating expenses, before costs associated with planned expansion, through the elimination of operational and administrative redundancies. PNC expects Riggs to add to its earnings in 2007.Sandler O’Neill & Partners LP acted as the financial advisor to PNC and Wachtell, Lipton, Rosen & Katz acted as its legal advisor. Lehman Brothers, Inc. acted as the financial advisor to Riggs and Sullivan & Cromwell LLP acted as its legal advisor.