BancorpSouth & Cadence Merger Approved by FDIC

The proposed merger of BancorpSouth Bank (BXS) and Cadence Bancorporation (CADE) has recently been approved by the Federal Deposit Insurance Corporation.

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The deal, which was announced on April 12, 2021, is set to close on October 31, 2021. (See BancorpSouth stock charts on TipRanks)

With the assumption of fully realized cost savings, the deal is expected to be 17% accretive to the earnings of both BancorpSouth and Cadence. The deal should be 14% accretive if 75% of cost savings are realized. Furthermore, upon its closure, the deal is likely to be immediately accretive to tangible book value per share.

As per the terms of the deal, shareholders of Cadence will receive 0.7 shares of BancorpSouth common stock for each share held. Additionally, a one-time special cash dividend of $1.25 per share will be paid to Cadence shareholders. (See Cadence stock charts on TipRanks)

Furthermore, following the merger, BancorpSouth will change its name to Cadence Bank, and the company’s ticker symbol will change from BXS to CADE on the NYSE.

The Chairman and CEO of Cadence, Paul B. Murphy, Jr., said, “This merger will leverage the respective strengths of both institutions, enhancing our ability to serve all stakeholders with a stronger, more comprehensive offering of products and services for customers.”

Last week, Jefferies analyst Ken Usdin maintained a Hold rating on BancorpSouth and raised the price target to $32 (6.7% upside potential) from $28. (See Top Smart Score Stocks on TipRanks)

The stock has a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average BancorpSouth price target stands at $33 and implies upside potential of 10% to current levels.