Pricing, Charter Pledges Sealed Deal for Wintrust

The Illinois bank secured an agreement to buy Macatawa Bank by committing to a collar and promising to keep its charter and brand intact in Michigan.

Hello again, Bank Slaters!

A flurry of mergers means an influx of regulatory filings that shed light on the nuances of negotiations. Wintrust’s agreement to buy Macatawa Bank in Michigan is interesting because of the difference made by including a collar in the final bid.

A collar agreement is a common technique used to create a hedge against fluctuations in stock prices. It provides a guaranteed fixed price for part of a deal’s stock consideration.

Here’s a rundown of how the deal between Wintrust (a seasoned veteran when it comes to pursuing small bank acquisitions) and Macatawa came together.