What is the primary purpose of this 8-K filing?

This 8-K filing announces a material definitive agreement, specifically Capital One Financial Corporation's entry into an Agreement and Plan of Merger with Hibernia Corporation. It details the terms of the proposed merger, its valuation, and the conditions for completion.

What is the value of the proposed merger?

The merger is valued at approximately $5.3 billion. This valuation is based on Capital One's closing stock price of $78.08 on March 4, 2005, and the exchange ratio of 0.2261 shares of Capital One common stock plus $15.35 cash per Hibernia share.

What is the consideration for Hibernia shareholders?

Hibernia common stock holders will have the option to elect, subject to proration, to receive either cash or Capital One common stock. The total value per Hibernia share is defined as $15.35 plus 0.2261 shares of Capital One common stock, with the stock portion valued based on a five-day average trading price prior to merger completion.

What are the key conditions for the merger to be completed?

The consummation of the merger is contingent upon several conditions, including the approval of Hibernia's common stock holders, receipt of necessary regulatory approvals, and the absence of any legal prohibitions. Additionally, accuracy of representations and warranties and material compliance with covenants by both parties are required, along with legal opinions confirming the tax-free status of the reorganization.

CAPITAL ONE FINANCIAL CORP 8-K: Material Agreements

Summary

Capital One Financial Corporation (COF) announced a significant strategic move by entering into a definitive merger agreement with Hibernia Corporation, a Louisiana-based financial institution. This transaction, valued at approximately $5.3 billion based on Capital One's stock price at the time, represents a substantial expansion for Capital One. Under the terms of the agreement, Hibernia shareholders will have the option to receive a combination of cash and Capital One common stock, with the total per-share consideration equivalent to $15.35 plus 0.2261 shares of Capital One stock, based on a five-day average trading price. The merger is subject to customary closing conditions, including regulatory and shareholder approvals. This acquisition is poised to significantly increase Capital One's market presence and scale. The agreement outlines standard provisions, including mutual covenants to conduct business in the ordinary course and restrictions on Hibernia seeking alternative business combinations. The inclusion of Hibernia's Chairman, E.R. Campbell, on Capital One's Board of Directors post-merger signals a degree of integration. Investors should note the potential for proration in the stock/cash election for Hibernia shareholders and that the merger is expected to qualify as a tax-free reorganization, subject to counsel opinions.

Key Highlights

1Capital One Financial Corporation (COF) has entered into a definitive merger agreement with Hibernia Corporation.
2The total transaction value is approximately $5.3 billion, based on Capital One's stock price of $78.08 on March 4, 2005.
3Hibernia shareholders can elect to receive cash or Capital One common stock, with a value of $15.35 plus 0.2261 shares of COF stock per Hibernia share (subject to proration).
4The merger is subject to customary conditions, including approval from both companies' shareholders and regulatory bodies.
5Hibernia's Chairman, E.R. Campbell, will join Capital One's Board of Directors upon completion of the merger.
6The agreement includes mutual covenants to maintain ordinary course of business and exclusivity clauses for Hibernia regarding alternative transactions.
7The transaction is structured to qualify as a tax-free reorganization for federal income tax purposes, pending legal opinions.

CAPITAL ONE FINANCIAL CORP 8-K Report, Material Agreement (Mar 9, 2005)

Summary

Key Highlights

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