PNC Financial Agrees to Buy Riggs for $779 Million (Update8)

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PNC Financial Agrees to Buy Riggs for $779 Million (Update8)
2004-07-16 16:14 (New York)

PNC Financial Agrees to Buy Riggs for $779 Million (Update8)

(Updates with closing share prices.)

By Scott Silvestri
July 16 (Bloomberg) -- PNC Financial Services Group Inc.,
Pennsylvania's biggest bank, agreed to buy Riggs National Corp.
for $779 million, taking over a bank weakened by a money-
laundering scandal to enter the Washington, D.C. market.
PNC, based in Pittsburgh, will pay $24.25 a share in cash
and stock for Washington-based Riggs, the companies said in a
statement. That's 7 percent more than yesterday's closing price.
Riggs, whose deposits plunged 22 percent in the past year,
paid a $25 million penalty in May for failing to report
suspicious transactions to regulators. This week it was cited in
a congressional report for lapses in reporting transactions
involving Chilean dictator Augusto Pinochet and Saudi diplomats
who may have had ties to two Sept. 11 hijackers.
``The money laundering and other issues -- that's something
specific to Riggs management, and that's being swept away,''
said Wendell Perkins, chief investment officer at Johnson Asset
Management, who helps manage $800 million, including the firm's
Small Cap Value Fund, which has Riggs as its top holding.
``That's a very attractive price for a bank of its dominance in
the lucrative D.C. marketplace.''
Riggs plans to sell or shut its international banking unit,
which served embassies in Washington, before the purchase is
complete, said PNC spokesman Brian Goerke. Excluding that unit,
PNC would be left with a bank that has $5.6 billion in assets,
$3 billion in deposits and $3 billion in assets under
management. Riggs is the biggest bank in Washington, with 23
percent of the deposits there, according to Federal Deposit
Insurance Corp. data.

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