-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DntEhYoK0Xe7g7ERSGyR4NTU7hMiF6qsYcbiV5gUISR60U81f1AR/UIl9bGeQ3VT VWx0avSkcO0cN3mKcadGkA== 0000950168-97-002386.txt : 19970821 0000950168-97-002386.hdr.sgml : 19970821 ACCESSION NUMBER: 0000950168-97-002386 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970830 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970820 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNION CORP CENTRAL INDEX KEY: 0000036995 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 560898180 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10000 FILM NUMBER: 97666829 BUSINESS ADDRESS: STREET 1: ONE FIRST UNION CTR CITY: CHARLOTTE STATE: NC ZIP: 28288-0630 BUSINESS PHONE: 7043746565 MAIL ADDRESS: STREET 1: FIRST UNION CORPORA STREET 2: ONE FIRST UNION CENTER CITY: CHARLOTTE STATE: NC ZIP: 28288-0630 FORMER COMPANY: FORMER CONFORMED NAME: CAMERON FINANCIAL CORP DATE OF NAME CHANGE: 19750522 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION NATIONAL BANCORP INC DATE OF NAME CHANGE: 19721115 8-K 1 FIRST UNION CORPORATION - 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) August 20, 1997 --------------------------- FIRST UNION CORPORATION (Exact name of registrant as specified in its charter) North Carolina 1-10000 56-0898180 (State of other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) One First Union Center Charlotte, North Carolina 28288-0013 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (704)374-6565 (Former name or former address, if changed since last report.) Item 5. Other Events. On August 20, 1997, First Union Corporation (the "Corporation") entered into an Agreement and Plan of Merger (the "Acquisition Agreement"), which provides, among other things, for the acquisition (the "Acquisition") of Wheat First Butcher Singer, Inc. ("WFBS") by the Corporation. A copy of a news release (the "News Release") relating to the Acquisition is being filed as Exhibit (99)(a) to this report, and such News Release is incorporated herein by reference. Exhibit 99(b) hereto contains certain materials used by the Corporation in connection with a telephone conference call (the "Conference Call") with analysts and others on the date hereof with respect to the Acquisition, and such materials are incorporated herein by reference. Certain of the materials include certain forward-looking statements regarding each of the Corporation, WFBS, and the combined company following the Acquisition. Such forward-looking statements involve certain risks and uncertainties, including a variety of factors that may cause the Corporation's actual results to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) expected cost savings from the Acquisition may not be fully realized or realized within the expected time frame; (2) revenues following the Acquisition may be lower than expected; (3) competitive pressure among financial institutions may increase and adversely affect the businesses engaged in by the combined company; (4) costs, difficulties or delays related to the integration of the businesses or systems of the Corporation and WFBS may be greater or longer than expected; (5) interest rate, stock market and monetary fluctuations may adversely affect the businesses engaged in by the combined company; (6) general economic conditions, either nationally or in the states or regions in which the combined company will be doing business, may be less favorable than expected; or (7) legislation or regulatory changes may adversely affect the businesses in which the combined company would be engaged. Additional information with respect to factors that may cause actual results to differ materially from those contemplated by such forward-looking statements is included in the Corporation's 1997 Second Quarter Report on Form 10-Q and may be included in subsequent reports filed by the Corporation with the Securities and Exchange Commission. Item 7. Financial Statements and Exhibits. (c) Exhibits. (99)(a) The News Release. (99)(b) The materials used in connection with the Conference Call. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FIRST UNION CORPORATION Date: August 20, 1997 By: /s/ Kent S. Hathaway Name: Kent S. Hathaway Title: Senior Vice President EXHIBIT INDEX Exhibit No. Description (99)(a) The News Release. (99)(b) The materials used in connection with the Conference Call. EX-99 2 EXHIBIT 99(A) N E W S (First Union logo) Wednesday August 20, 1997 FIRST UNION TO ACQUIRE WHEAT FIRST BUTCHER SINGER, INC. CAPITAL MARKETS AND RETAIL BROKERAGE CAPABILITIES ENHANCED CHARLOTTE - First Union has signed a definitive agreement to acquire Wheat First Butcher Singer, Inc., a full service investment banking, brokerage and asset management company based in Richmond, Va. The acquisition will accelerate First Union's ability to provide equity underwriting to its growing corporate client base, while also expanding its services to individual investors. Founded in 1934, Wheat First is employee-owned and operates 126 offices in 19 states and the District of Columbia. The firm has nearly 3,000 employees corporate-wide. Upon closing, Wheat First will operate under the name Wheat First Union, a division of First Union Capital Markets Corp., First Union's Section 20 subsidiary. Its asset management subsidiary will continue to operate under the name of Mentor Investment Group. Under the terms of the agreement, First Union will exchange 10,267,029 shares of First Union common stock, which values the acquisition at $471 million, based on First Union's closing stock price of $45.875 on Aug. 15, 1997. In addition, FTU has established an employee retention pool of $75 million in restricted stock to be paid over a 3 year period to certain key employees of Wheat First. First Union expects the transaction to be accretive to earnings upon consummation. The acquisition will be accounted for as a pooling of interests and is expected to close during the fourth quarter of 1997, pending Wheat First stockholder approval, regulatory approval, as well as other customary conditions of closing. "Wheat First is the perfect partner for First Union - enabling us to strengthen our capital markets, asset management and brokerage services immediately," said Edward E. Crutchfield, chairman and chief executive officer of First Union Corporation. -- MORE -- FIRST UNION TO ACQUIRE WHEAT FIRST - PAGE 2 "The new organization combines First Union's powerful East Coast franchise, national corporate middle market client base and capital markets capabilities with Wheat First's well-established equity underwriting and distribution, merger and acquisition advisory and municipal finance capabilities." First Union says high client demand is driving its immediate need to offer equity underwriting. The acquisition of Wheat First gives First Union a solid platform on which to build additional equity underwriting momentum. After receiving equity underwriting authority from the Federal Reserve in May, First Union said that it planned to build its equity underwriting business, but would consider acquiring an investment bank that met its financial, strategic and cultural requirements. "Wheat First is a great strategic fit for First Union on every level," said Crutchfield. "The firm is highly-regarded in the financial services industry and has a strong reputation for integrity among clients and competitors. With the rapid consolidation of the financial services industry, offering equity underwriting to our clients now enables us to gain a critical competitive edge in this dynamic marketplace." The acquisition also creates the largest retail brokerage in the Southeast, giving First Union additional channels for offering its extensive line of retail financial products and services. First Union Brokerage Services, Inc. currently has more than 3,100 Series 6 & 7 - -licensed employees; the new organization will have nearly 4,200. Upon closing, First Union will operate a brokerage office network of over 2,000 locations offices in 19 states. Wheat First, through its asset management subsidiary, Mentor Investment Group, currently manages approximately $9 billion in the Mentor Mutual Funds. The Evergreen Keystone Funds, First Union's proprietary mutual fund family, has approximately $31 billion in assets. "Based on its business strategy, size, culture and reputation, First Union was - -- hands-down -- the right choice given the rapidly consolidating financial industry." said Marshall Wishnack, chairman and chief executive officer of Wheat First. -- MORE -- FIRST UNION TO ACQUIRE WHEAT FIRST - PAGE 3 Wishnack will report jointly to Ken Thompson, executive vice president and co-managing director of First Union's Capital Markets Group and Don McMullen, executive vice president and head of First Union's Capital Management Group. Wheat First has been lead-manager or co-manager of 123 equity offerings since 1992. Wheat First is currently ranked 18th nationally in the equity underwriting league tables on managed offerings through June 30, 1997. The company has a specialized industry focus similar to First Union's, which includes the communications, financial institutions, healthcare, real estate sectors and others. First Union's primary engines for generating fee income over the past several years have been its Capital Markets and Capital Management Groups. The acquisition of Wheat First builds a bridge between these two strategic lines of business and fuels the momentum for the future. In the second quarter of 1997, First Union Capital Markets reported a 148 percent increase in fee income from 1996 and the Capital Management Group reported 51 percent growth year over year. First Union Corporation is a full financial services provider and the nation's 6th largest banking company based on assets of approximately $143 billion at June 30, 1997. Media Contact at First Union is Marianna Sheridan at 704-383-3715 (office) or 704-333-6447 (home). Media Contact at Wheat First is Marc Rose at 804-782-3679 (office) or 804-353-6973 (home). Investor Contact at First Union is Alice Lehman at 704-374-4139. -- END -- EX-99 3 EXHIBIT 99(B) Exhibit 99(b) First Union and Wheat First Butcher Singer Analyst Conference Call August 20, 1997 First Union & Wheat First: Continuing to Build Engines for Growth - -------------------------------------------------------------------------------- Accelerates Capital Markets equity capabilities o Customer demand stronger than expected o Increases competitive product offerings for Capital Markets clients o Develops stronger relationships with CEOs and key decision makers o Immediately enhances cross-sell opportunities o Provides more proprietary equity product for brokerage channel Strengthens Capital Management Group o Creates 8th largest retail brokerage network in the nation o Increases mutual fund assets under management by 37% Benefits First Union shareholders o Immediately accretive to earnings o Bolsters fee income o Further enhances revenue growth opportunities - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 1 Growth Platform Terms of Transaction - -------------------------------------------------------------------------------- Purchase Price* $471 million, consisting of 10,267,029 First Union shares Retention Pool $75 million in restricted stock, paid over 3 years Accounting Method Tax-free pooling of interests Expected Closing 4Q97 Approvals Required Customary regulatory approvals * Based on FTU closing price of $45.875 on August 15, 1997. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 2 Transaction Terms Financial Benefits for Shareholders - -------------------------------------------------------------------------------- o Immediately accretive to earnings o Further diversifies revenue o Enhances revenue and net income growth o Minimal EPS risk - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 3 Financial Benefits Transaction Overview - --------------------------------------------------------------------------------
Multiple of Deal Value: Market Capitalization of Recent Deal Values of Last 12 Months: Wheat First 11 Broker Peers* 5 Investment Banks** - ------------------------------------------------------------------------------------------------ (excluding retention payments) Revenue 0.90x 1.07x 1.23x Net Income 13.4x 15.9x 12.2x Book Value 3.00x 2.14x 4.44x (including retention payments***) Revenue 1.01x 1.07x 1.34x Net Income 15.0x 15.9x 13.2x Book Value 3.35x 2.14x 4.73x
* A.G. Edwards, Advest, First Albany, Interra, Interstate/Johnson Lane, Legg Mason, McDonald & Co., Morgan Keegen, Piper Jaffrey, Raymond James, Scott & Stringfellow. Average excluding highest and lowest observation. Source: Bloomberg ** Alex Brown, Dillon Read, Robertson Stephens, Montgomery Securities, Oppenheimer & Co. Average. Source: Company presentations, analyst reports, news reports. *** Value paid at closing plus present value of payments for retention (net of tax benefits). Deferred compensation (if applicable) also present-valued for comparable transactions. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 4 Growth Platform 1 Powerful Synergies Resulting from Combination of First Union & Wheat First Complementary First Union o Many strong customer relationships with near-term equity needs o Significant client base in health care, communications, financial institutions, real estate o Bank brokerage channel o Full array of retail financial products o Continuing momentum in asset management business Wheat First o Full-line equity capabilities o Equity research focus on selected industries including health care, communications, financial institutions, real estate o Non-bank brokerage channel o Need for full range of financial products o Adds $11.5 billion in assets under management Compatibility Focus on specialized industries and middle-market Similar geographic footprint Consistent corporate cultures - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 5 Powerful Synergies Strategic Fit: Capital Markets First Union Wheat First Equity Underwriting x Equity Research x Equity Sales & Trading x M&A Advisory x x High Yield x x Loan Syndications x Asset-Backed Securities x Derivatives x Private Equity x Mezzanine Capital x Real Estate Finance x x Municipal Finance x x Specialized Industry Focus x x Private Placements x x - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 6 Strategic Fit Wheat First Equity Platform Research o 30 analysts o Covers 300 companies o Focused on specialized industries Investment Banking o 33 bankers o Integrated Corporate Finance, M&A, equity o 123 equity transactions o 14 convertible debt and preferred stock deals o 70 M&A transactions Sales and Trading o 63 Sales/Traders o Covers 1,250 institutional clients o Maintains a market in 300 NASDAQ stocks Note: Transactions are those completed since 1992. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 7 Equity Platform Growing Profitability (Graph appears here with the following text.) Strategic Importance Profitability CEO CFO Treasurer Cash Management Risk Management Private Debt Bank Loans High Yield Syndicated Loans Equity o Private Equity o Mezzanine Capital o IPO's o Secondary Offerings M&A - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 8 Strategic Growth Strategic Fit: Capital Management Group FTU Wheat First Combined Mutual Fund Assets $31 $9* $40 (in billions) Licensed Reps 3,135 1,053 4,188 (Series 6 & 7) Brokerage Offices** 1,900 117 2,017 States Served 12 19 19 * Total assets under management equal $11.5 billion. ** Includes all First Union branches which are licensed with the SEC to sell brokerage services. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 9 Strategic Fit Wheat First Historical Financial Performance Revenue and Net Income (Dollars in Millions) (Graph appears here with the following plot points.)
1990 1991 1992 1993 1994 1995 1996 1997 14% CAGR in Revenue Over 7 Year Period 198 194 259 311 349 319 414 494 521* 26% CAGR in Net Income Over 7 Year Period 6.0 3.7 13.7 20.0 21.1 20.8 28.4 32.0 35.0*
* Trailing 12 months ended July 31, 1997. Fiscal Year Ends March 31. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 10 Historical Performance Wheat First Business Unit Performance Composition of Revenue* (Pie chart appears here with the following plot points.) Capital Markets Equity 12% Fixed Income 8% Clearing 6% Asset Management Asset Management 5% Retail Brokerage Retail 69% *Based on internal management reporting data for FYE March 31, 1997. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 11 Wheat First Overview Wheat First Overview: Capital Markets Group o Includes Equity and Fixed Income Groups o Focused on middle-market and selected industries o Integrated corporate finance, M&A, debt, equity research, sales and trading capabilities o National coverage through 9 institutional sales offices o Lead- or Co-managed 123 equity deals since 1992, ranked 16th in 1997 IPOs (Pie chart appears here with the following plot points.) Net Income* $7.4 million Total Revenue* $99 million *Based on internal management reports for the 12 months ended July 31, 1997. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 12 Wheat First Overview Wheat First Overview: Retail Brokerage Group o Provides comprehensive brokerage services including stocks, bonds, mutual funds and a variety of other investments o Over 1,000 financial consultants in 117 full service brokerage offices o 540,000 customer accounts representing over $35 billion in client assets o WFS Clearing Services provides execution, clearing and settlement services to 54 brokerage firms (Pie chart appears here with the following plot points.) Net Income* $21.5 million Total Revenue* $393 million *Based on internal management reports for the 12 months ended July 31, 1997. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 13 Wheat First Overview Wheat First Overview: Asset Management - Mentor Investment Group o Offers 25 Mentor mutual funds o Employs numerous investment styles for managing retail and institutional funds o Experienced rapid growth in managed assets from $600 million in 1992 to over $11.5 billion currently o 750,000 shareholders (Pie chart appears here with the following plot points.) Net Income* $6.1 million Total Revenue* $29 million *Based on internal management reports for the 12 months ended July 31, 1997. - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 14 Wheat First Overview Summary: First Union/Wheat First First Union o Leverages our primary engines for growth o Immediately accretive to earnings o Accelerates fee revenue growth o Similar client base and corporate cultures Capital Markets o One-stop shopping capabilities o Leverages existing relationships o Enhances competitive position o Creates better cross-sell opportunities Capital Management Group o Creates 8th largest brokerage in nation o Provides new channel for financial products o Increases assets under management - -------------------------------------------------------------------------------- (First Union logo appears here) Wheat First exhibit 15 Summary
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