Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Virginia Commerce Bancorp , a mid-Atlantic regional bank, popped as much as 10% after announcing a buyout of the company by United Bankshares for $490.6 million.
So what: This deal should come as no surprise with Virginia Commerce announcing that it was shopping itself around a little more than two weeks ago. Under the terms of the deal, United Bankshares will use its common stock to finance the buyout, agreeing to 0.5442 of its shares for every Virginia Commerce share - or about $14 based on yesterday's close.
Now what: Not surprisingly, as well, the stock gave up much of its early gains and is now up just 5%, markedly below the offer price. With United Bankshares using its own shares as financing, Virginia Commerce could become a hostage to United's share price which is currently down on the day. In addition, as I mentioned a little more than two weeks ago, Virginia Commerce had already received a huge pop when it announced it was seeking a buyer, and was unlikely to find a large premium since it was already valued at a premium relative to its peers.
Craving more input? Start by adding Virginia Commerce Bancorp to your free and personalized Watchlist so you can keep up on the latest news with the company.
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The article Why Virginia Commerce Bancorp Shares Spiked originally appeared on Fool.com.
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