Prosperity Bancshares Inc. has struck a deal to acquire Stellar Bancorp Inc. and its banking subsidiary in a transaction valued at roughly $2 billion, the companies announced Wednesday — a move set to redraw the banking map in Texas like a river changing course.
Under the agreement, Prosperity to buy Stellar Bancorp through a mix of stock and cash, deepening its footprint in some of the state’s most competitive markets.
Deal Structure and Valuation
Prosperity will issue 0.3803 shares of its common stock and pay $11.36 in cash for each outstanding share of Stellar common stock, according to the announcement. The valuation is based on Prosperity’s Tuesday closing price of $72.90.
Markets reacted swiftly. By Wednesday afternoon, Prosperity shares were down more than 8%, trading at $66.49 per share, reflecting investor recalibration as the scale of the deal sank in.
Advisors and Legal Counsel
Prosperity is being advised by Wachtell, Lipton, Rosen & Katz, while Norton Rose Fulbright is serving as legal counsel to Stellar. Stellar is also working with Keefe, Bruyette & Woods as its financial adviser.
Wachtell Lipton’s deal team is led by partners Edward D. Herlihy and Matthew T. Carpenter. Deal team details for Norton Rose Fulbright were not immediately available.
