Gently does it

14 June 2005 By Mike Verdin

This is the latest in a series of midsized deals by the French bank in the US. It makes strategic sense overall. And this particular deal also washes its face financially.

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BNP Paribas announced an agreed deal to buy Commercial Federal, a Nebraskabased retail bank, for $1.4bn.

The purchase price is equivalent to 14.8 times Commercial Federal's expected earnings for 2006. It offers a 27% premium to the average closing price of the bank's shares over the last six months.

The takeover is being undertaken through BancWest, BNPP's US arm, which has expanded through acquisition from the west coast of America into the MidWest.

Commercial Federal, which operates 198 branches in seven US states, reported a 14.6% fall to $76m in earnings for last year. Revenues fell by 11.5% to $575m.

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