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CBC persisted in effort to talk with Cadence

October 22, 2010

Editor’s note: This is the first of two stories which will be developed out of the recent proxy filing on the proposed purchase of Cadence Bank by Community Bancorp of Houston, Texas. The follow-up story will be published in Saturday’s edition of the Starkville Daily News. This first story will highlight action taken through August regarding the transaction.

Community Bancorp officials persisted in their efforts to buy Cadence Bank even as the Starkville-based financial institution moved forward with a deal with Trustmark, a federal document filing shows.
A proxy filing sent to the Securities and Exchange Commission shows CBC officials details the steps taken along the way.
A timeline of events is as follows.
• Aug. 5 — CBC asks for exclusive right to negotiate an acquisition deal with Cadence. However, CBC officials did not specify a price or price range for this proposal. Cadence declined this request.
• Aug. 17 — CBC and Cadence officials hold a conference call detailing the structure of a possible deal, discussing the need for CBC to conduct a due diligence review of Cadence’s loan portfolio and CBC’s request to have a third-party organization take care of this review.
• Aug. 18 — CBC recommends that Cadence retain the third party to conduct valuation work on the loan portfolio and asks Cadence officials again to consider an exclusive right to negotiate the transaction, also again without a price or price range. Cadence officials turned this down a second time.
• Aug. 24 — CBC indicates its desire to conduct further due diligence on certain portions of the loan portfolio and again asked for Cadence to pay for the third-party review.
This time, CBC officials estimated a price range of 50 cents to $1.50 per share of common stock. On this date, Cadence officials agreed to pay for the third-party review.
• Aug. 25 — Cadence’s senior management met with Richard Hickson, CEO of Trustmark. Trustmark officials indicated their willingness to make a stock-for-stock deal with Cadence at a price equal to about $3 per share of Cadence common stock.
• Aug. 27 — Cadence’s board of directors met to discuss the Trustmark deal and the interest CBC expressed. After a long discussion, the board of directors allow management to negotiate with Trustmark and draft a letter of intent at a price of $3 per common share payable in Trustmark common stock.
On this day, Cadence asked CBC to halt their due diligence evaluation of Cadence.
On the same day, CBC officials expressed disappointment in this request and asked that Cadence officials continue to interact with them on a possible deal.
• Aug. 30 — Cadence officials receive a letter from CBC officials reiterating their interest in a deal and asking that they they be able to conduct an on-site review of the loan portfolio.
• Aug. 31 — Cadence officials enter a non-binding letter of intent with Trustmark. with a total value of $36 million.
The letter also allowed for Trustmark to purchase the $44 million in preferred stock in Cadence owned by the U.S. Treasury.
Plus, Cadence granted Trustmark exclusivity through Sept. 15 and stopped all meetings and talks with CBC officials.

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