BLACKWELL SANDERS PEPER MARTIN LLP
4801 MAIN STREET SUITE 1000 KANSAS CITY, MO 64112
P.O. BOX 219777 KANSAS CITY, MO 64121-6777
TEL: (816) 983-8000 FAX: (816) 983-8080
WEBSITE: www.blackwellsanders.com
Dennis P. Wilbert DIRECT FAX: (816) 983-8080
DIRECT: (816) 983-8124 E-MAIL: dwilbert@blackwellsanders.com
February 28, 2007
Via EDGAR Transmission
Mr. William Friar
Senior Financial Analyst
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549-4561
Re: Commerce Bancshares, Inc.
Form S-4
Filed on February 6, 2007
File No. 333-140475
Dear Mr. Friar:
Per your conversation with my colleague on February 27, 2006, I am writing
on behalf of Commerce Bancshares, Inc. (the "company") to supplement the
information initially provided in my letter dated February 26, 2007 in response
to the comments of the staff (the "staff") of the Division of Corporation
Finance of the Securities and Exchange Commission (the "Commission") set forth
in your letter dated February 22, 2007, with respect to the above-referenced
filing (the "comment letter"). This letter is being filed with the Commission
electronically today.
To more accurately describe what shareholders of South Tulsa will receive
if the transaction is consummated, we have further revised the disclosure on the
cover page of the prospectus and elsewhere throughout the prospectus to include
a clear and concise plain English explanation of what shareholders of South
Tulsa will receive if the transaction is consummated.
The revised cover page language is as follows:
The Boards of Commerce, CBI-Kansas and South Tulsa have agreed to the
merger of South Tulsa into CBI-Kansas. The total merger consideration value is
estimated to be $26,250,000. If the merger is approved, each South Tulsa
shareholder will receive Commerce common stock with a value of $340.54 per share
of South Tulsa common stock. The per share merger consideration will be equal to
$340.54 in Commerce common stock if the Commerce stock price is between $45.30
and $50.06. Thus, if the Commerce stock price is within this
KANSAS CITY, MISSOURI o ST. LOUIS, MISSOURI o OVERLAND PARK, KANSAS o OMAHA, NEBRASKA
SPRINGFIELD, MISSOURI o EDWARDSVILLE, ILLINOIS o WASHINGTON, D.C. o LONDON, UNITED KINGDOM
AFFILIATES: LEEDS o MANCHESTER
MEMBER OF THE WORLD SERVICES GROUP
Mr. William Friar
February 28, 2007
Page 2
range, each shareholder of South Tulsa will receive between approximately 6.80
and 7.52 shares of Commerce common stock per share of South Tulsa common stock.
If the Commerce stock price is less than $45.30, each shareholder of South
Tulsa will receive approximately 7.52 shares of Commerce common stock per share
of South Tulsa common stock (which results in the value of the Commerce stock
received being less than $340.54). On the other hand, if the Commerce stock
price is greater than $50.06, each shareholder of South Tulsa will receive
approximately 6.80 shares of Commerce common stock per share of South Tulsa
common stock (which results in the value of the Commerce stock received being
more than $340.54). This result is because the parties agreed not to adjust the
amount of Commerce common stock received beyond these limits. See "What South
Tulsa Shareholders Will Receive in the Merger" on page ___, "Summary--The Merger
Consideration" on page ___, and "The Merger--Conversion of South Tulsa Common
Stock" on page ___. Commerce common stock is traded on The Nasdaq Stock Market
under the symbol "CBSH."
The section of the prospectus entitled "What South Tulsa Shareholders Will
Receive in the Merger" has been revised as follows:
WHAT SOUTH TULSA SHAREHOLDERS WILL RECEIVE IN THE MERGER
The number of shares of Commerce common stock into which one share of South
Tulsa common stock will be converted in the merger is referred to in this
document as the "merger consideration." The total merger consideration value is
estimated to be $26,250,000. Shares of South Tulsa common stock will be
converted into merger consideration of $340.54 per share of South Tulsa common
stock, consisting of shares of Commerce common stock, if the Commerce stock
price (as determined under the Agreement and Plan of Merger) is between $45.30
and $50.06. Thus, if the Commerce stock price is within this range, each
shareholder of South Tulsa will receive between approximately 6.80 and 7.52
shares of Commerce common stock per share of South Tulsa common stock.
If the Commerce stock price is less than $45.30, the Commerce stock price
will nevertheless be deemed to be $45.30 and therefore the merger consideration
will consist of approximately 7.52 shares of Commerce common stock per share of
South Tulsa common stock (which results in the merger consideration being less
than $340.54 per share of South Tulsa common stock). If the Commerce stock price
is greater than $50.06, the Commerce stock price will nevertheless be deemed to
be $50.06 and therefore the merger consideration will consist of approximately
6.80 shares of Commerce common stock per share of South Tulsa common stock
(which results in the merger consideration being more than $340.54 per share of
South Tulsa common stock). The last reported sales price on January 30, 2007 for
Commerce shares as reported by The Nasdaq Stock Market was $48.99. You should
obtain current market prices for
Mr. William Friar
February 28, 2007
Page 3
the Commerce common stock. See "Risk Factors" beginning at page __. Please refer
to the table below for an illustration of how the per share merger consideration
will be determined under the various possible Commerce stock price scenarios.
See "Summary--The Merger Consideration" on page ___ and "The Merger--Conversion
of South Tulsa Common Stock" on page ___.
Possible Per Share Merger Consideration Scenarios
- ---------------------------------------- -------------------------------------- --------------------------------------
Commerce stock price Per Share Merger Consideration ($) Exchange Ratio
(Shares of Commerce common stock per
share of South Tulsa common stock)
- ---------------------------------------- -------------------------------------- --------------------------------------
Less than $45.30 Less than $340.54 7.52
- ---------------------------------------- -------------------------------------- --------------------------------------
$45.30 - $50.06 $340.54 6.80 - 7.52
- ---------------------------------------- -------------------------------------- --------------------------------------
Greater than $50.06 Greater than $340.54 6.80
- ---------------------------------------- -------------------------------------- --------------------------------------
The following questions and answers within the section of the prospectus
entitled "Questions and Answers About the Merger and the Special Meeting" have
been revised as follows:
Q: What will I receive for my South Tulsa common stock?
A: You will receive merger consideration with a value of $340.54 per share of
South Tulsa common stock you hold immediately prior to the Effective Time
(as defined in the Agreement and Plan of Merger). This amount will consist
of shares of Commerce common stock with an approximate exchange ratio
between 6.80 and 7.52 shares of Commerce common stock per share of South
Tulsa common stock.
Q: Is the per share value of $340.54 fixed?
A: Only if the Commerce stock price falls between $45.30 and $50.06. If the
price is above the range, the per share value will be more, and if it falls
below the range, the per share value will be less. This occurs because the
Agreement and Plan of Merger only adjusts the number of shares of Commerce
common stock to be issued when the price is between $45.30 and $50.06. For
example, if the Commerce stock price is less than $45.30, each shareholder
of South Tulsa will receive approximately 7.52 shares of Commerce common
stock per share of South Tulsa common stock (which results in the value of
the Commerce stock received being less than $340.54). On the other hand, if
the Commerce stock price is greater than $50.06, each shareholder of South
Tulsa will receive approximately 6.80 shares of Commerce common stock per
share of South Tulsa common stock (which results in the value of the
Commerce stock received being more
Mr. William Friar
February 28, 2007
Page 4
than $340.54). See "What South Tulsa Shareholders Will Receive in the
Merger" on page ___, and "Summary - The Merger Consideration" on page ___.
The section of the prospectus entitled "Summary--The Merger Consideration"
has been revised as follows:
The Merger Consideration
As more fully set forth below, the Agreement and Plan of Merger provides,
generally, that each share of South Tulsa common stock, par value $1.00 per
share, outstanding immediately prior to the Effective Time (as defined in the
Agreement and Plan of Merger) will be converted into the right to receive
$340.54 of Commerce common stock, par value $5.00 per share, in the merger (or
between approximately 6.80 and 7.52 shares of Commerce common stock per share of
South Tulsa common stock). The total merger consideration value is estimated to
be $26,250,000.
The Agreement and Plan of Merger provisions are intended, within certain
limits, to adjust the value of the Commerce stock consideration in the merger so
that the total merger consideration will equal $340.54 of Commerce common stock
per share of South Tulsa common stock (and the exchange ratio of Commerce common
stock per share of South Tulsa common stock will be between approximately 6.80
and 7.52). This adjustment will occur if the Commerce stock price is between
$45.30 and $50.06. If the Commerce stock price is less than $45.30, the value of
Commerce stock received will be less than $340.54, and each shareholder of South
Tulsa will receive approximately 7.52 shares of Commerce common stock per share
of South Tulsa common stock. On the other hand, if the Commerce stock price is
greater than $50.06, the value of Commerce stock received will be greater than
$340.54, and each shareholder of South Tulsa will receive approximately 6.80
shares of Commerce common stock per share of South Tulsa common stock. See "The
Merger--Conversion of South Tulsa Common Stock," beginning at page ___ and "The
Merger--Conversion of South Tulsa Common Stock" on page ___.
We have attached the Agreement and Plan of Merger to this Proxy
Statement/Prospectus as Appendix A. We encourage you to read the Agreement and
Plan of Merger as it is the legal document that governs the merger.
The following risk factor within the section of the prospectus entitled
"Risk Factors" has been revised as follows:
Mr. William Friar
February 28, 2007
Page 5
Because the Market Price of Commerce Common Stock Will Fluctuate, South Tulsa
Shareholders Cannot Be Sure of the Value of the Merger Consideration They Will
Receive.
Upon completion of the merger, each share of South Tulsa common stock will
be converted into merger consideration consisting of $340.54 of Commerce common
stock (or between approximately 6.80 and 7.52 shares of Commerce common stock
per share of South Tulsa common stock). The market value of the Commerce common
stock may vary from the closing price of Commerce common stock on the date we
announced the merger, on the date that this document was mailed to South Tulsa
shareholders, on the date of the special meeting of the South Tulsa shareholders
and on the date we complete the merger and thereafter. While the exchange ratio
will be appropriately adjusted if the Commerce common stock price is between
$45.30 and $50.06, any change in the market value of Commerce common stock prior
to completion of the merger outside of that range will affect the value of the
merger consideration that South Tulsa shareholders will receive upon completion
of the merger. Accordingly, at the time of the special meeting, South Tulsa
shareholders may not know or be able to calculate the market value of the merger
consideration they would receive upon completion of the merger. Stock price
changes may result from a variety of factors, including general market and
economic conditions, changes in South Tulsa's and Commerce's respective
businesses, operations and prospects, and regulatory considerations. Many of
these factors are beyond South Tulsa's and Commerce's control. You should obtain
current market quotations for shares of Commerce common stock and for shares of
South Tulsa common stock.
The section of the prospectus entitled "The Merger--Conversion of South
Tulsa Common Stock" has been revised as follows:
Conversion of South Tulsa Common Stock
South Tulsa shareholders will receive Commerce common stock with a value of
$340.54, which equates to an exchange ratio within the range of approximately
6.80 and 7.52 shares of Commerce common stock per share of South Tulsa common
stock. The value of Commerce common stock that a holder of South Tulsa common
stock would receive in an exchange will vary if the price of Commerce common
stock falls outside the range of $45.30 and $50.06 because the merger
consideration is not further adjusted if the Commerce stock price is below
$45.30 or above $50.06.
For example, if the Commerce stock price is below $45.30, the value of
Commerce stock received will be less than $340.54, and each shareholder of South
Tulsa will receive approximately 7.52 shares of Commerce common stock per share
of South Tulsa common stock. On the other hand, if the Commerce stock price is
greater than $50.06, the value of Commerce
Mr. William Friar
February 28, 2007
Page 6
stock received will be greater than $340.54, and each shareholder of South Tulsa
will receive approximately 6.80 shares of Commerce common stock per share of
South Tulsa common stock.
If between the date of the Agreement and Plan of Merger and the Effective
Time, the outstanding shares of Commerce common stock shall have been further
changed into a different number of shares or a different class, by reason of any
issuance of common stock, recapitalization, reclassification, split-up,
combination, exchange, readjustment, reorganization, merger, consolidation,
distribution, stock split, stock or other dividend, or similar transaction, the
Agreement and Plan of Merger shall be adjusted to the extent appropriate to
reflect such event.
If you have any questions regarding any of the foregoing revisions, please
feel free to call me at 816-983-8124.
Very truly yours,
BLACKWELL SANDERS PEPER MARTIN LLP
By: /s/ Dennis P. Wilbert
--------------------------------------
Dennis P. Wilbert
cc: J. Daniel Stinnett, Esq.
C. Bruce Crum, Esq.
