Wells Fargo & Co. to acquire Pacific Northwest Bancorp for 3.0 times revenue

Weekly Corporate Growth Report, May 26, 2003

The Deal: Wells Fargo & Co. has signed a definitive agreement to acquire Pacific Northwest Bancorp in a stock transaction. Pacific Northwest shareholders will receive $35 in Wells Fargo common stock for each share of Pacific Northwest. The exact exchange ratio will be determined by the average closing prices of Wells Fargo shares for the 20 consecutive trading days prior to the close of the deal. The transaction has been approved by the boards of both companies, but still requires approval from regulators and Pacific Northwest shareholders. The deal is expected to close during the third quarter of 2003.

Discussion: Pacific Northwest Bancorp is the holding company for Pacific Northwest Bank. The bank operates about 60 branches in western and central Washington and in the Seattle area. The company also has subsidiaries that offer insurance and investment products.

Wells Fargo operates approximately 3,000 bank branches in some two dozen western and midwestern states. The company also operates 750 home mortgage stores and about another 1,200 consumer finance offices. Wells Fargo is the fifth-largest bank in the United States.

There has recently been speculation that Wells Fargo was targeting FleetBoston Financial Corp., but the rumor was met with some skepticism for several reasons, including Wells Fargo's traditional stance that it wouldn't venture east of the Mississippi.