Notable Mergers and Acquisitions of the Day 06/17: (GRM) (RY)/(PNC) (BJ) (ING)/(COF)

• Graham Packaging Company Inc. (NYSE: GRM) Friday announced the signing of a definitive merger agreement under which the company will be acquired by Reynolds Group Holdings Limited in an all-cash transaction for $25.50 per share, or a total of approximately $4.5 billion including assumed indebtedness.
  
  The deal is expected to close in the second half of this year. Reynolds intends to finance the payment of the purchase price through fully committed financing and cash on hand at Reynolds.
  
  
• Royal Bank of Canada (NYSE: RY) is reportedly in advanced talks to sell its retail banking business, RBC Bank, to PNC Financial Services Group (NYSE: PNC) in a deal that could fetch up to $3.7 billion.
  
  Bloomberg, citing people familiar with the matter, said PNC is likely to win over a rival bid from BB&T (NYSE: BBT), and a deal may come within days.
  
  The acquisition would allow PNC to expand its reach in the Southeastern U.S. beyond just Florida, as the RBC unit has 420 branches concentrated in six states across the region.
  
  PNC said it doesn't comment on rumors or speculation, and RBC declined to comment.
  
  
• Private equity firm Leonard Green disclosed in an SEC filing that is has submitted a bid for BJ's Wholesale Club Inc. (NYSE: BJ) on June 16, 2011.
  
  Terms of the proposal were not disclosed.
  
  From the filing: "On June 16, 2011, LGP, on behalf of GEI V and GEI Side V, and CVC Capital Partners Advisor, Inc., in respect of funds advised by it submitted a joint proposal to the Issuer, in compliance with the terms of their respective confidentiality agreements with the Issuer. LGP previously filed such confidentiality agreement as Exhibit 7.1 to Amendment No. 1 to Schedule 13D dated March 22, 2011. The Joint Acquisition Proposal contemplates that a newly formed entity jointly controlled by the LGP Funds and the CVC Funds would acquire all of the outstanding equity securities of the Issuer through a merger. The Joint Acquisition Proposal contemplates that the aggregate equity investment required to fund the Potential Acquisition would be obtained equally from the LGP Funds and the CVC Funds. There can be no assurance that LGP and CVC will reach an agreement with the Issuer with respect to the Potential Acquisition or any other transaction relating to the Issuer."
  
  
• After the market closed yesterday, Capital One Financial Corporation (NYSE: COF) entered a definitive agreement under which Capital One will acquire ING Direct from ING Groep (NYSE: ING) in a stock and cash transaction valued at $9.0 billion.
  
  Under the agreement, Capital One will purchase ING Direct from ING Groep for $6.2 billion in cash and approximately 55.9 million Capital One shares, valued at $2.8 billion, based on a Capital One share price of $50.07, the 10-day average of Capital One closing prices for the period ending June 15, 2011.
  
  Capital One expects this transaction will be accretive to tangible book value at closing, accretive to EPS in 2012 and result in mid-single digit accretion in 2013.
  
  Capital One expects to finance the cash portion of the consideration, in part, through a public equity raise of approximately $2 billion and debt offerings of approximately $3.7 billion prior to the close of the transaction.
  
  In connection with ING Groep's 9.9 percent pro forma ownership stake in Capital One, ING Groep will have the right to name one member to the company's Board of Directors and has agreed to a customary lock-up on its shares. The transaction is subject to customary regulatory approvals, including banking approvals in both the U.S. and The Netherlands, and is expected to close in late 2011 or early in 2012.
  
  Morgan Stanley, Barclays Capital and Centerview Partners LLC acted as financial advisers to Capital One and Wachtell, Lipton, Rosen and Katz, Mayer Brown and Loyens & Loeff acted as legal advisers.

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