ZIONS FIRST NATIONAL BANK SIGNS DEFINITIVE MERGER AGREEMENT TO PURCHASE DISCOUNT CORPORATION OF NEW YORK FOR APPROXIMATELY $65 MILLION
SALT LAKE CITY and NEW YORK, May 21 /PRNewswire/ -- Zions First National Bank, a wholly owned subsidiary of Zions Bancorporation (OTC: ZION), and Discount Corporation of New York (NYSE: DCY) today jointly announced that they have signed a definitive merger agreement under which Zions will acquire Discount Corporation, one of 39 primary dealers in U.S. government securities, for approximately $65 million, or $8 per share, subject to adjustment under certain circumstances. The boards of directors of both companies have approved the transaction. Under the terms of the agreement, promptly following the closing, Discount stockholders will be entitled to receive an initial cash payment of $7 per share. Thereafter, they will be entitled to receive an additional $1 per share, subject to adjustment based upon a post- closing audit of Discount's balance sheet and a determination of the Company's net asset value on the closing date, taking into account certain agreed upon adjustments. In the event that the net asset value is determined to exceed $8.375 per share, stockholders will be entitled to receive the additional $1 per share plus an amount equal to the amount by which the per share net asset value exceeds $8.375. In the event that the per share net asset value is determined to be less than $7.75, stockholders will be entitled to receive, in addition to the $7 per share initial payment, an amount equal to $1 per share minus the amount by which the per share net asset value is below $7.75. The merger is subject to approval by two-thirds of the outstanding common shares held by Discount Corporation's stockholders of record as of June 11, 1993. It is anticipated that a special meeting of
Discount's stockholders will be held in early July to vote on the transaction. The transaction is also subject to bank regulatory approval.
Harris H. Simmons, president and chief executive officer of Zions Bancorporation, said, "Discount represents an excellent strategic acquisition for Zions. It is a well-established primary dealer with an excellent reputation and history. It also has an experienced sales force and a valuable institutional customer base. The acquisition will broaden Zions' portfolio of products and expand our institutional client mix. Our existing institutional customers will benefit from Discount's status as a primary dealer in U.S. government securities as well as its distribution capabilities in agency securities." Rafe de la Gueronniere, chairman and chief executive officer of Discount Corporation, said, "Three months ago, management and the board determined to review all options for Discount going forward. This transaction achieves our single paramount objective -- to provide maximum value to our stockholders. It also provides our customers with continuity of coverage from our New York office. We are excited about working with Zions, which is an outstanding bank with a reputation for quality service." Under the terms of the agreement, Discount Corporation will operate as a division of Zions First National Bank, retaining its 72-year old name and its present New York City location at 58 Pine Street. In addition to enhanced capitalization from Zions, Discount and its customers will gain access to Zions Bank's wide range of investment products. Zions First National Bank provides full commercial, consumer, investment, trust, and correspondent banking services, primarily in Utah. The Bank sells Government, agency, mortgage backed, municipal and money market securities and specializes in Utah municipal bonds and Small Business Administration (SBA) loan pools. It ranks among the top dealers in the nation in terms of SBA 7(a) pools created and is the largest SBA 504 lender in the U.S. Zions First National Bank was founded in 1873 by Brigham Young, president of the Church of Jesus Christ of Latter-day Saints (Mormon). In 1960, the Church sold its controlling interest in the Bank, which is now a wholly owned subsidiary of Zions Bancorporation, the second largest bank holding company in Utah, with total assets of $3.9 billion as of March 31, 1993. The company also operates bank subsidiaries in
Nevada and Arizona as well as equipment leasing and insurance subsidiaries and is the largest mortgage banking company in Utah. In all, Zions operates 100 banking offices in its three-state primary market area, and one office abroad.
Discount Corporation of New York was founded in 1918 by a group of the largest New York City banks to act as a dealer in the developing secondary market for bankers' acceptances. The presidents of these banks comprised the original board of directors. Discount entered the government securities business in 1921 and has been a primary dealer since 1960. The corporation has been publicly owned since 1961 and has been traded on the New York Stock Exchange since 1986. -0- 5/21/93 /CONTACT: Steve Thomas, vice president of Zions Bancorporation, 801-524-2125, or Phebe Miller, general counsel of Discount Corporation 212-248-5057, or Jeffrey Z. Taufield or Mary Horne of Kekst and Company, 212-593-2655, for Zions Bancorporation and Discount Corporation/ (ZION DCY)
CO: Zions First National Bank; Discount Corporation of New York ST: Utah, New York IN: FIN SU: TNM
TS -- NY010 -- 1102 05/21/93 09:19 EDT
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|Date:||May 21, 1993|
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