Hilltop Proposes To Buy Remainder Of SWS Group For $7 Per Share - Update

(RTTNews) - Hilltop Holdings Inc. (HTH) Friday said it has submitted a written proposal to the SWS Group, Inc.'s (SWS) board to acquire its outstanding shares that it does not already own for $7.00 per share in 50 percent cash and 50 percent in Hilltop common stock.

In connection with Hilltop's earlier investment in the Dallas, Texas-based financial services holding company, SWS had issued Hilltop a warrant to purchase 8.7 million shares of SWS at an exercise price of $5.75 per share. Hilltop currently beneficially owns 24 percent of SWS common stock, inclusive of the warrant.

Hilltop, a Dallas-based financial holding company, had invested $50 million in SWS in 2011 in the form of a senior unsecured loan.

At the time of the investment, Hilltop's chairman Gerald Ford joined the board of SWS and Hilltop's President and Chief Executive Jeremy Ford became a non-voting observer to the SWS board.

The proposal is subject to approval of SWS board of directors, execution of a definitive agreement and subsequent approval by SWS stockholders.

Hilltop said it is is prepared to expeditiously negotiate a definitive acquisition agreement with the SWS Board of Directors.

Gerald Ford said, "We believe that Hilltop's and SWS's businesses are highly complementary, and that the proposed transaction is a compelling opportunity for SWS's stockholders, as well as its employees and customers."

Stephens Inc. is serving as financial advisor to Hilltop and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.

HTH closed Thursday's regular trading at $23.44 on the NYSE, while SWS ended at $6.06.