Company: MCHB
Filing Date: 2025-07-03
Form Type: S-4
Source: 0001140361-25-024872
Chunk: 205

Company: Mechanics Bancorp
Filing Date: 2025-07-03
Form: S-4
Chunk 205
---
 stock based on a fixed exchange ratio agreed at signing, based upon an implied pre-transaction equity value of $300 million for HomeStreet and an implied pre-transaction equity value for Mechanics of $3.3 billion. Pursuant to the terms of the LOI, at the closing of the proposed transaction, existing Mechanics shareholders would own approximately 91.7% of the combined company, and existing HomeStreet shareholders would own approximately 8.3% of the combined company, and the directors of the combined company would be comprised of the current directors of Mechanics and one existing member of the HomeStreet board selected by Mechanics. The LOI required the parties to enter into a 45-day exclusivity period during which Mechanics would complete its due diligence, HomeStreet would engage in its own due diligence, and the parties would negotiate definitive documentation for the proposed transaction. Mechanics requested a response to its LOI no later than January 13, 2025.

On December 23, 2024, the HomeStreet board held a special meeting to discuss Mechanics’ LOI. Advisers from KBW and S&C attended the meeting. After summarizing the LOI for the HomeStreet board, Mr. Mason suggested that management and KBW spend additional time reviewing the economics and other terms of the offer. Mr. Mason also proposed that management and KBW assess whether there were additional parties who may be interested in engaging with HomeStreet on a potential strategic merger transaction. Representatives of KBW discussed that KBW had received outreach from other parties potentially interested in engaging in a transaction with HomeStreet. Mr. Mason also discussed the risk to employee retention posed by an acquisition announcement, particularly following the entry into the merger agreement with FirstSun and its subsequent termination. During the meeting, advisers from S&C refreshed the directors regarding their fiduciary duties. Following discussions, the HomeStreet board directed management to work with HomeStreet’s advisors to further evaluate the LOI and Mechanics’ proposal and directed KBW to contact third parties to assess their interest in pursuing a transaction with HomeStreet.

During the following two weeks, HomeStreet management, with assistance from its financial and legal advisors, evaluated Mechanics’ proposed transaction and KBW reached out to potential third parties to assess their interest in pursuing a transaction with HomeStreet. Throughout this period, representatives of Mechanics, with the assistance of representatives of J.P. Morgan, Mechanics’ financial advisor, and Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”), Mechanics’ outside counsel, continued to analyze the