UPDATE 1-Harleysville to buy Willow Financial in all-stock deal
(Recasts, adds details, share movement)
May 21 (Reuters) - Harleysville National Corp (HNBC.O) said it agreed to buy Willow Financial Bancorp Inc WFBC.O for about $162 million in stock as it seeks to expand in Pennsylvania, sending Willow Financial shares up 22 percent.
Willow Financial shareholders will receive 0.73 Harleysville shares for each share held as part of the deal. Based on Harleysville's Tuesday closing price, the deal values Willow Financial at $10.28 a share.
Following the deal, which is expected to close in the fourth quarter, Harleysville shareholders would own 73 percent of the combined company.
King of Prussia, Pennsylvania-based Willow Financial is the holding company for Willow Financial Bank, a $1.6 billion savings bank with 29 branch offices in Philadelphia, Montgomery, Chester, and Bucks Counties.
Harleysville expects the deal to add to earnings in 2009 and result in annual savings of $15 million to $20 million.
The company said it would not be closing any branches as a result of the deal, adding that the combined company would have assets of $5.5 billion.
Janney Montgomery Scott LLC and Bybel Rutledge LLP advised Harleysville on the transaction, while Willow Financial was advised by Sandler O'Neill and Partners LP.
Shares of Harleysville were down 3 percent at $13.65, while those of Willow Financial were up 22 percent at $9.46 in morning trade on Nasdaq. (Reporting by Abhishek Chanda in Bangalore; Editing by Deepak Kannan)
