Synovus Financial Corp. (NYSE:SNV) shares dropped 9% in Friday’s pre-market session after the company revealed an $8.6 billion all-stock merger agreement with Pinnacle Financial Partners (NASDAQ:PNFP). The deal will combine the two regional lenders under the Pinnacle Financial Partners name.
As part of the transaction, Synovus shareholders will receive 0.5237 shares of a new Pinnacle parent company for each Synovus share they hold, translating to a value of $61.18 per share—a 10% premium over Synovus’s unaffected trading price.
Despite the premium, the announcement triggered a sell-off. Citi analyst Benjamin Gerlinger said the drop reflected “market speculation leading into the merger announcement and an elevated operational hurdle for PNFP’s long-term market share capture strategy.” He added, however, that the negative reaction “should be short lived as the pro forma franchise retains the operational wherewithal of legacy PNFP while adding a stable core deposit franchise via SNV.”
Under the deal terms, current Pinnacle shareholders will hold approximately 51.5% of the new entity, while Synovus shareholders will own around 48.5%. Synovus CEO Kevin Blair is set to lead the combined company as President and CEO, while Pinnacle CEO Terry Turner will take on the role of Chairman.
Evercore ISI’s John Pancari commented on the sector trend, saying “momentum is clearly building in regional bank M&A,” though he noted the “10% premium could surprise to the downside given the bank’s attractive footprint, strong market share, and favorable growth dynamics.”
The companies expect the transaction to be about 21% accretive to Pinnacle’s projected operating EPS in 2027, with an estimated 2.6-year earnback period for tangible book value dilution.
Synovus Financial Corp stock price
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