SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Under Section 240.14a-12
CENTURA BANKS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
ROYAL BANK OF CANADA TO ACQUIRE CENTURA BANKS, INC.
Acquisition will serve as foundation for U.S. banking growth strategy
ROCKY MOUNT, N.C./TORONTO, January 26, 2001 -- Royal Bank of Canada (TSE, NYSE:
RY) and Centura Banks, Inc. (NYSE: CBC), headquartered in Rocky Mount, North
Carolina, today announced they have signed a definitive merger agreement by
which Royal Bank will acquire Centura.
Under the terms of the agreement, each share of Centura outstanding
will be converted into 1.684 shares of Royal Bank of Canada upon
closing. The indicated value of the transaction is US$2.3 billion
(C$3.5 billion), based on Royal Bank of Canada's closing share price of
US$34.35 (NYSE) and C$51.80 (TSE) on January 25, 2001.
The acquisition is subject to regulatory approval in Canada and the
U.S., approval from the shareholders of Centura Banks, Inc. and other
customary closing conditions. The transaction is expected to be
completed by mid-summer at which time Centura will adopt the name RBC
Centura Banks, Inc.
In connection with the merger agreement, Centura Banks, Inc. has
granted Royal Bank a customary option to purchase a number of shares equal to
19.9 per cent of its outstanding common stock under limited circumstances.
"Centura has an experienced management team, strong customer and
community orientation and a corporate culture similar to ours," said
John Cleghorn, chairman and chief executive officer of Royal Bank of
Canada. "The transaction is consistent with our U.S. growth strategy,
which is based on focused and manageable acquisitions. Centura's
approach to developing and maintaining customer relationships while
building size through acquisitions has successfully driven its own
growth strategy. We want to preserve and build on their success as we
grow our personal and commercial banking platform in the U.S.," said
Cleghorn.
"This is an outstanding opportunity for us to execute our successful
retail banking model in one of the most attractive markets in the
United States. Centura's positioning as a full line retailer of
financial services provides the opportunity to create a strong retail
banking platform in the United States with considerable growth
potential," noted James Rager, vice-chairman of Royal Bank of Canada,
responsible for its personal and commercial banking platform.
Commenting on the transaction, Cecil W. Sewell, Jr., Centura chief
executive officer said, "Royal Bank of Canada has a stellar reputation and a
corporate culture very similar to our own. They offer us the best opportunity to
preserve and strengthen this culture while realizing our full potential of
offering financial solutions that make a positive difference in the lives of our
customers."
On completion of the transaction, Sewell will become chairman of RBC
Centura Banks, Inc., and it is intended that he will become a member of the
board of directors of Royal Bank of Canada. H. Kel Landis, currently president
of Centura Bank, will become chief executive officer of RBC Centura Banks, Inc.
The transaction provides the opportunity to integrate key operations of
RBC's existing U.S. consumer businesses. These include: Security First Network
Bank, based in Atlanta, the country's first and number one rated Internet bank,
and Prism Financial Corporation, a Chicago-based national retail mortgage
origination company with more than 1,100 loan officers and 180 offices in 29
states. It also complements the businesses of Liberty Life Insurance Company and
Liberty Insurance Services Corporation, both based in Greenville, S.C. and
Minneapolis-based Dain Rauscher Corporation, a leading regional, full service
securities firm with 3,800 employees and a network of 90 offices in 27 states.
About Centura Banks, Inc.
An US$11.5 billion-asset financial services company, Centura Banks,
Inc. is based in Rocky Mount, N.C. Its 3,600 employees provide a
complete line of banking, investment, insurance, leasing and asset
management services to individuals and businesses in North Carolina,
South Carolina and Virginia. Centura's broad range of financial
solutions is provided through Centura Highway, the bank's multifaceted
customer access system that includes more than 240 full-service
financial offices, telephone banking, an extensive ATM network, PC
banking, online bill payment and the bank's suite of Internet products
and services. The bank has client relationships with over 420,000
households (650,000 customers). For more information, please visit
www.centura.com.
About Royal Bank of Canada
Royal Bank of Canada (RY) is a diversified financial services company.
It provides personal and commercial banking, wealth management
services, insurance, corporate and investment banking, online banking
and transaction processing on a global basis. The company employs
50,000 people who serve 10 million personal, business and public sector
customers in North America and in some 30 countries around the world.
For more information, please visit www.royalbank.com.
Safe Harbor
This news release includes forward-looking statements that are subject to
certain risks and uncertainties. Actual results may differ materially from the
results contemplated in these forward-looking
statements. Statements regarding the expected date of completion of the
transaction are subject to forward-looking statements, the risk that closing
conditions will not be satisfied or not satisfied in a timely manner, that
regulatory approvals will not be obtained or not obtained in a timely manner or
that the shareholders of Centura will not approve the merger. Statements
regarding the expected benefits of the transaction are subject to the following
risks: that expected benefits will not be achieved; that revenues following the
acquisition will be lower than expected; that the businesses will not be
integrated successfully; that merger costs will be greater than expected; the
inability to identify, develop and achieve success for new products and
services; increased competition and its effect on the combined companies; the
general economic conditions, either internationally, nationally or in the states
in which the combined companies will be doing business, will be less favorable
than expected; the general risks associated with the companies' business; and
that legislation or regulatory changes adversely affect the businesses in which
the combined companies would be engaged.
RBC will be filing a registration statement and Centura Banks, Inc. will be
filing a prospectus/proxy statement and other relevant documents concerning the
merger with the SEC. WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT, THE
PROSPECTUS/PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE
SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be able to
obtain the documents free of charge at the SEC's website, www.sec.gov. In
addition, documents filed with the SEC by RBC and Centura will be available free
of charge from each company's Investor Relations Department.
Centura Banks, Inc. and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of Centura in
favor of the merger. The directors and executive officers of Centura Banks, Inc.
include the following: R.H. Barnhardt, T.A. Betts Jr., H.T. Bowers, D.T. Clancy,
S.M. Custer, E.L. Evans, B.W. Franklin, S.J. Goldstein, S.E. Gravely, J.H. High,
R.L. Hubbard, W.H. Kincheloe, H.K. Landis III, C.T. Lane, W.H. Murphy, J.H.
Nelson, D.E. Painter Jr., O.T. Parks III, M.S. Patterson, F.L. Pattillo, P.H.
Pope, W.H. Redding Jr., C.M. Reeves III, B.T. Rogers, C.W. Sewell Jr., G.T.
Stronach III, A.P. Thorpe III, S.M. White Jr., W.H. Wilkerson, C.P. Wilkins, and
J.B. Williams. Collectively, as of January 25, 2001, the directors and executive
officers of CENTURA beneficially owned approximately 9% of the outstanding
shares of Centura common stock. Stockholders of Centura Banks, Inc. may obtain
additional information regarding the interests of such participants by reading
the proxy statement when it becomes available.
Media Contacts:
Andy Mus 404-875-1444 ext. 234 for Centura Banks, Inc.
Toronto Jeff Keay 416 974-5506 Royal Bank of Canada
Montreal Raymond Chouinard 514-874-6556 Royal Bank of Canada
New York Eric Starkman 212 461-2226 Starkman & Associates
Investor Relations Contacts:
Nabanita Merchant, senior vice-president 416-955-7803 Royal Bank
Anthony Ostler, senior manager 416-955-7804 Royal Bank
Steven Goldstein, chief financial officer 252-454-8356 Centura Banks, Inc.
Conference Calls:
Royal Bank of Canada and Centura Banks, Inc. invite interested investors to
listen to a conference call with analysts and institutional investors. The call
will take place at 9:30 a.m. EST, January 26, 2001. It will be accessible live
via the Internet and archived on both the Internet and telephone. A media
teleconference will commence at 10:30 a.m. EST.
Conference Call Access:
Analysts' Call: 9:30 a.m. EST and archived commencing Noon EST
Internet: www.royalbank.com/investorrelation/conference.html
Phone recording: Available from Noon EST, January 26, 2001 to
midnight, February 2, 2001, by dialing
416 626-4100 [reservation number -17799885] or
1-800-558-5253 [reservation number - 17802971].
Media Conference Call: 1-888-568-1969 - 10:30 a.m. EST
Talking Points
Why are we doing this?
Because of you. The simple answer is that Royal Bank of Canada sought us out
because of our people, our franchise, our culture and our approach to business.
It's a pretty good compliment to be offered the opportunity to become the U.S.
banking operation for Canada's largest bank and one of the best financial
services companies in North America.
Their interest came at a time when we were facing an increasingly competitive
operating environment and where our ability to achieve success in our specialty
businesses was restricted by our lack of scale...despite the good growth of
these businesses.
We could have succeeded by remaining independent, but in light of the Royal Bank
of Canada offer, we no longer felt it was our best option. The independent road
was filled with uncertainties and risks that are removed by being part of RBC.
We could have looked for a merger of equals, but the reality is that there were
few opportunities, limited cultural matches, and such a merger would have
resulted in our loss of focus on the customer as we integrated the cultures. We
could have pursued an in-market transaction, but the cost-saving measures
required to make this type of transaction successful wouldn't have been the best
answer for our employees or our customers.
So when Royal Bank of Canada, an out-of-market, out-of-state, out-of-country,
financial services company indicated it wanted Centura to be its U.S. banking
platform, we listened hard. Because of our franchise, because of our employees,
because of our customer focus, we were offered a situation where we could
essentially operate as a stand-alone company, where management, employees and
technology would remain essentially intact, but where we would be afforded
greater resources to grow our business in the complementary company of RBC's
U.S. insurance, Internet banking, brokerage and mortgage businesses. It was
clearly a win-win situation for our employees, our customers and our
shareholders. It will allow us to access to capital, technology and other
resources that would have been unavailable had we remained independent. It will
provide better growth opportunities for our employees.
What did Royal Bank of Canada see in Centura?
Royal Bank of Canada, with assets of $200 billion, is the largest bank in Canada
and has a global presence in the financial services industry. RBC recognized in
Centura a unique opportunity to expand their retail and commercial banking
operations in the United States. RBC's goal is to build a strong North American
platform for retail services. Our customer-focused approach, our geographic
footprint, and our culture are highly attractive to Royal Bank of Canada. RBC
wants us to be the focal point for its U.S. banking strategy, which will
complement its other U.S. operations. These are: Minneapolis-based Dain Rauscher
Corporation, a leading regional full-service securities firm with 3,800
employees and a network of 90 offices in 27 states; Liberty Life Insurance
Company and Liberty Insurance Services Corporation, both based in Greenville,
S.C.; Atlanta-based Security First Network Bank, the country's first and No.
1-rated Internet bank; and Prism Financial Corporation, a Chicago-based national
retail mortgage origination company with more than 1,100 loan officers and 180
offices in 29 states. With our addition as RBC's banking platform, the
synergistic potential is apparent and exciting.
How did this evolve?
Royal Bank of Canada approached us in the fall, and we liked what we saw.
Negotiations became serious over the past 30 days or so.
What will change?
That's hard to say accurately at this point. We do know that our name will
change to RBC-Centura, which is part of RBC's global branding strategy, and also
allows us to retain our identity with our customers and in the communities where
we do business. Because of the complementary nature of our business, the risk of
divestitures and large-scale job reductions at Centura is virtually
non-existent. In terms of compensation and benefits, we're not expecting
anything to change in 2001. We'll have more details for you as soon as we know
them.
Will RBC's big bank image hurt our reputation with customers as customer-focused
agile bank?
RBC is the largest bank in Canada, but its success is in large part due to it
customer-oriented philosophy, which meshes very well with ours. In fact, there
are many ways current and potential customers will benefit from this
relationship. RBC's vision is to grow profitable relationships with each one of
its business and personal customers by creating tailored customer experiences,
building a more personalized and friendly brand and corporate image, reducing
costs, and effectively managing risk and capital. This is very close to our
vision of making a difference in the lives of our customers as a full-line
retailer of financial services that understands customers and their needs.
Will Centura remain in Rocky Mount?
Yes. Centura will be the retail banking headquarters for Royal Bank in the
United States and the headquarters will be in Rocky Mount.
What effect will this have on our customers?
None at first. You should remain focused on making a positive difference in the
lives of your customers, just as you do now. In the future, the level of
sophistication with which we are able to provide financial solutions should
expand, based on the synergies and resources of RBC's other U.S. operations.
This is a very positive development for customers and for employees, since it
provides us with better ability to service our customers needs, and creates more
opportunities for ensuring our employees are successful. Other than that, we
want to make the combination transparent to our clients.
How does the fact that we will be owned by a foreign entity affect our
customers' deposits?
The change in ownership of Centura will have no impact on our customers. We will
continue to be based in Rocky Mount, and the Federal Reserve will continue to
have oversight responsibilities for Centura's business. It also is worth noting
that Royal Bank shares are listed on the New York Stock Exchange, which means
the company is subject to NYSE standards of practice.
How will Centura interact with RBC's other U.S. financial services operations?
Keep in mind that both Centura and RBC develop products and services based on
insight into customer needs. Over the next several months, we will be exploring
all opportunities to find synergies with these other operations in order to
build stronger relationships with our customers.
Will there be any job reductions at Centura as a result of these "synergies?" No
plans currently exist for any consolidations at Centura. As is the normal
business practice of both Centura and RBC, however, all operations are
continually reviewed to capitalize on changing opportunities. Part of this
process relies in our ability to maximize efficiencies and effectiveness. That
said, with the increased resources and enhanced capabilities we will have to
grow our business, we expect this transaction to ultimately result in more jobs.
What does a Canadian bank know about the U.S. banking business?
One of the most appealing aspects of this transaction is the strength of
Centura's people in helping build RBC's profile in the United States. Royal Bank
has had a presence in the U.S. since the beginning of the 20th century. Today,
RBC does business throughout the U.S. and is the largest bank in Canada, with a
strong and stable financial foundation.
What do we tell our customers?
Client letters and statement stuffers will be created to make sure your
customers are well informed about the transition. In the meantime, tell them
this will not disrupt their service and that they can expect the same great
service from you.
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