Filed by Washington Mutual, Inc. pursuant
to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule
14a-12 of the Securities Exchange Act of
1934.
Subject company: Bank United Corp.
Commission File No: 0-21017
FOR IMMEDIATE RELEASE
Washington Mutual to Acquire Bank United for $1.5 Billion;
Combination to Create Leading Consumer Banking Platform in Texas
Transaction Extends Washington Mutual's Position in the
Fast-Growing Texas Retail Banking Market
SEATTLE, WA and HOUSTON, TX --August 21, 2000 -- In a move that will
significantly expand its presence in Texas, Washington Mutual, Inc. (NYSE: WM)
today announced that it has signed a definitive agreement to acquire Bank United
Corp. (Nasdaq: BNKU) for approximately $1.5 billion. The transaction will create
a $10.7 billion deposit banking operation in Texas and gives Washington Mutual
top-tier market share in three of the four largest metropolitan markets in the
state.
Under the terms of the agreement, each share of Bank United common stock
will be converted into 1.3 shares of Washington Mutual common stock. Based on
Washington Mutual's closing stock price of $32 13/16 on Friday, August 18, 2000,
the multiple paid is 11.6 times Bank United's trailing 12-month earnings (period
ended June 30, 2000) and 1.67 times Bank United's book value as of June 30,
2000. The transaction, which will be accounted for as a purchase, is immediately
accretive to cash earnings per share and is expected to be accretive to
Washington Mutual on a reported earnings-per-share basis in 2002.
"This transaction gives Washington Mutual the critical mass to capitalize
on the outstanding growth potential of the Texas market," said Kerry Killinger,
Washington Mutual's chairman, president and CEO.
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"It's a logical extension of our strategy to become the leading consumer
bank in the nation's most attractive geographic markets. Bank United's strong
market share and branch presence in Texas' leading metropolitan markets
complements the strong positions we currently maintain in the Pacific Northwest,
California and Florida."
In connection with the transaction, Bank United shareholders will receive
tradable contingent payment right certificates representing the right to receive
the proceeds, if any, received by Bank United or Washington Mutual relating to
the pending forbearance claim against the U.S. government, less related taxes
and expenses. Bank United will establish a trust to manage that litigation and
distribute the proceeds. Also, as part of the transaction, each share of Bank
United's 8 percent corporate premium income equity securities will be converted
into one share of a new series of Washington Mutual's premium income equity
securities with substantially the same terms.
With nearly 20 million consumers, the Texas economy is the third largest in
the U.S. and its deposit market is the country's fourth largest. The Texas
economy is growing at a rate of 4.6 percent, outpacing the economic growth of
the U.S. as a whole.
"Like Washington Mutual, Bank United has demonstrated that it can generate
strong loan growth, as well as significantly increase fee income and checking
accounts," Killinger said. "Bank United's success in diversifying its business
over the past few years is highly complementary to our own strategy to re-mix
the balance sheet with higher-yielding consumer, commercial and mortgage banking
assets. This is a great fit."
Killinger said that by combining Washington Mutual's solid balance sheet,
broad array of products and delivery channels with Bank United's strong Texas
retail franchise, "Washington Mutual will be able to deliver a premier retail
banking alternative to individuals and small- to medium-sized businesses in
Texas.
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"This transaction is a win-win for the shareholders of both companies and,
with our long track record of successfully integrating substantially larger
companies, we expect to complete this transaction seamlessly," Killinger added.
In the first nine months of its current calendar year ending June 30, Bank
United generated earnings of $98.3 million, or $2.77 per diluted share, up 17
percent from $78.2 million, or $2.37 per share in the prior year. With 155
branches, Bank United has approximately $8.8 billion in deposits, more than half
of which are lower-cost transaction accounts. Bank United has built a
particularly strong depository banking franchise with market shares of 3.49
percent in Dallas-Fort Worth and 8.16 percent in Houston.
"We've successfully broken out of the traditional thrift mold and have
become an increasingly important force in one of the leading consumer banking
markets in the nation," said Bank United's President and CEO Barry C.
Burkholder. "We are gratified that, as a result of this transaction, Bank United
shareholders will not only realize the value we've created over the past four
years, but will now also share in the long-term growth of one of the nation's
leading financial institutions -- one that has a history of combining excellent
returns and strong revenue growth with superior credit quality and a solid
balance sheet.
"We're also very pleased that this transaction will preserve the benefits
of Bank United's interest in its forbearance lawsuit for our shareholders," he
added.
"Washington Mutual's business approaches, overall strategy and commitment
to delivering shareholder value makes it an excellent partner for Bank United,"
said Lewis S. Ranieri, chairman of Bank United. "I believe that together, the
combined companies will be in an even stronger position to deliver superior
returns to shareholders over the long term."
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Burkholder added, "Our employees, customers and the communities we serve
will all benefit. First, from Washington Mutual's ability to provide the
broadest possible range of products and services to customers; and second,
through Washington Mutual's long-standing commitment to the local communities in
which it operates," Burkholder said. "Equally important, our employees will
benefit from being part of a larger organization that is committed to employees
and their professional development," he added.
Cost savings as a result of the transaction are estimated to be
approximately $87 million pre-tax in 2002 (fully phased in), or 30 percent of
Bank United's current cost base. The majority of the cost savings are expected
to come from the elimination of duplicate corporate and administrative expenses.
The companies said that, while approximately 600-650 duplicative positions
are expected to be eliminated as a result of the combination, normal attrition
at Bank United, coupled with Washington Mutual's anticipated company wide growth
and its customary practice of filling vacancies from within, means that fewer
employees will be affected. As a result, most Bank United's employees will be
offered jobs.
The Boards of Directors of both companies have unanimously approved the
transaction, which is anticipated to close in late 2000 or early 2001, subject
to the approval of Bank United's shareholders and other customary closing
conditions, including regulatory review. Bank United has agreed to pay a
break-up amount of approximately $52 million to Washington Mutual if the
transaction is terminated under certain circumstances. The break-up amount is
payable either in cash or through an exercise of an option to purchase up to
19.9 percent of Bank United's common stock.
Lehman Brothers acted as financial advisor to Washington Mutual. Goldman
Sachs acted as financial advisor to Bank United.
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With a history dating back to 1889, Washington Mutual is a financial
services company that provides a diversified line of products and services to
consumers and small- to medium-sized businesses. At June 30, 2000, Washington
Mutual and its subsidiaries had consolidated assets of $185.69 billion.
Washington Mutual currently operates more than 2,000 consumer banking, mortgage
lending, commercial banking, consumer finance and financial services offices
throughout the nation.
Bank United is the largest publicly traded depository institution
headquartered in Texas. At June 30, 2000, Bank United operated a 155-branch
community banking network in Texas, including 66 branches in the greater Houston
area; 77 in the Dallas/Fort Worth area, five in Midland, four in Austin and
three in San Antonio; operated 19 SBA lending offices in 13 states; is a
national middle-market commercial bank with 23 regional offices in 16 states;
originated mortgage loans through 11 wholesale offices in 11 states; operated a
national mortgage servicing business serving approximately 312,000 customers.
FORWARD-LOOKING STATEMENTS:
"This document contains forward-looking statements, which are not
historical facts and pertain to future operating results. These forward-looking
statements are within the meaning of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include, but are not limited to,
statements about our plans, objectives, expectations and intentions and other
statements contained in this document that are not historical facts. When used
in this document, the words "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and similar expressions are generally intended
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intended to identify forward-looking statements. These forward-looking
statements are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change. Actual results may differ materially from the results
discussed in these forward-looking statements for the reasons, among others,
discussed under the heading "Business-Risk Factors" in Washington Mutual's 1999
Annual Report on Form 10-K, which reasons include: the risk of the interest rate
environment further compressing our margin and adversely affecting our net
interest income; the risk of continued diversification of our assets and adverse
changes to credit quality; competition from other financial services companies
in all our markets; and the concentration of operations in California adversely
affecting our operating results if the California economy or real estate market
declines; the risk of our inability to integrate the operations of Bank United
in an efficient manner and achieve the projected cost savings; and the risk of a
slowdown in the Texas economy that would adversely affect credit quality and
loan origination."
With respect to Bank United, reference is made to the heading
"Forward-Looking Information" in their Annual Report on Form 10K for the year
ended September 30, 1999.
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Washington Mutual will be filing a registration statement with the
Securities and Exchange Commission (SEC) relating to the securities to be issued
to Bank United shareholders in the acquisition. This registration statement will
include a proxy statement for Bank United shareholders.
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SHAREHOLDERS OF BANK UNITED ARE URGED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE BECAUSE IT CONTAINS IMPORTANT INFORMATION REGARDING THE
ACQUISITION. Shareholders may obtain a free copy of the proxy statement and
other documents filed by Bank United when they become available on the SEC's
website at www.sec.gov.
# # #
Note to editors: A conference call discussing the transaction will be
held on Monday, August 21, 2000, at 10:00 a.m. EDT. The dial-in number
is 800-314-7867. A replay will be available from approximately 2:00 p.m
.EDT on August 21 until 9:00 p.m. EDT on August 28. The replay number
is 888/203-1111, and the access code is 428450. A live audio webcast of
the call is available online at www.wamu.com.
Today's news release and additional transaction details are available
on Washington Mutual's website, and, at no charge, through the
company's News On Demand System at 800/329-6236. Washington Mutual's
news releases may also be accessed on the Internet at
http://www.businesswire.com/cnn/wm.shtml.
Media Contact: Washington Mutual, Inc. Bank United Corp.
Libby Hutchinson Vern Stockton
206/461-2484 713/543-6920
800/228-9268
Investor Contacts: Washington Mutual, Inc. Bank United Corp.
JoAnn DeGrande Debbie Kemple
206/461-3186 713/543-6926
or
Ruthanne King
206/461-6421
For Washington Mutual: Abernathy MacGregor Group
Steve Bruce/Rhonda Barnat
212/371-5999
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[Washington Mutual Logo] [Bank United Corp Logo]
Washington Mutual / Bank United
At-A-Glance
(all dollar figures in thousands, except per share prices)
<TABLE>
<CAPTION>
As of June 30, 2000
-------------------------------------------
Washington Mutual Bank United
----------------- -----------------
<S> <C> <C>
Total Assets $185,687,190 $18,197,572
Total Deposits 80,596,348 8,819,413
Total Gross Loans 114,664,882 15,082,369
Nonperforming Assets 973,644 127,531
Nonperforming Assets/Assets 0.52% 0.70%
Stockholders' Equity/Assets 5.09% (1) 4.66% (1)
Book Value Per Share $16.43 $25.49
Common Shares Outstanding 538,875,903 (2) 32,477,697 (3)
Closing Stock Price per Share $32 13/16 $42 3/8
(August 18, 2000)
Market Capitalization $17.29 billion (4) $1.38 billion
(August 18, 2000)
Retail Branches 1,046 155
Loan Offices 209 11
Commercial Bank Offices 99 42
Consumer Finance / Specialty Mortgage Offices 592 --
Total ATM Locations 1,479 158
Consumer Banking Households Served 4,800,000 300,000
FTEs 28,255 2,622
</TABLE>
(1) Exclusive of unrealized net loss on available-for-sale securities.
(2) As of July 31, 2000.
(3) As of August 9, 2000.
(4) Excluding 12,000,000 shares held in escrow.
