PITTSBURGH -- Salvaging a deal that appeared dead earlier this week, the regional bank PNC Financial Services Group Inc. struck an agreement to pay about $642 million in cash and stock for Riggs Bank, an old-line Washington institution that ran into legal trouble over suspicious financial transactions.
PNC said yesterday that it has agreed to pay $20 per share for Riggs, $4.25 a share less than the price revealed last summer before Riggs ran into regulatory trouble. The price agreed on was higher than a revised offer of $19.32 per share Riggs said PNC had subsequently made and Riggs rejected.
The deal, approved by the boards at both companies, is expected to be closed as soon as possible, said Mark Hendrix, Riggs spokesman.
It is subject to regulatory clearance and approval by Riggs shareholders.
Riggs, which once had a near-monopoly on business with the capital's diplomatic community, had sued PNC on Monday after its suitor cut its buyout offer by about 20 percent after Riggs pleaded guilty to violations of a law to prevent money laundering. Riggs has dropped the suit.
PNC agreed in July to pay $24.25 a share, or a total of about $779 million in cash and stock, for Riggs.
Pittsburgh-based PNC sought to renegotiate that price after Riggs pleaded guilty to not reporting suspicious foreign transactions, including those of former Chilean dictator Augusto Pinochet. Riggs agreed to pay a $16 million fine, the largest criminal penalty ever imposed on a bank of that size, according to prosecutors.