M&T Bank buys Wilmington Trust for $351Million

 (Bloomberg) -- Wilmington Trust Corp., the Delaware bank founded by the du Pont family and undermined by souring loans, agreed to sell itself to M&T Bank Corp. for $351 million in stock, or about half its market value last week.

The deal values 107-year-old Wilmington Trust at $3.84 a share, or 46 percent less than its closing price Oct. 29. Investors will get 0.051 share of Buffalo-based M&T for each Wilmington share, the companies said today in a statement. Wilmington Chief Executive Officer Donald Foley said in a statement it was “the best option for our shareholders, as well as our clients and the employees.”

Wilmington Trust put itself up for sale as it prepared to report a sixth straight quarterly loss. The firm and its bankers at Lazard Ltd. contacted bigger lenders including M&T, Bank of Montreal and Toronto-Dominion Bank about a takeover, and solicited interest from private-equity investors in making a capital infusion, people with knowledge of the matter have said.

Wilmington said today the third quarter loss widened to $365.3 million from $5.9 million in the year-earlier period and $116.4 in the second quarter. Losses in the past two years were fueled by soured commercial real estate loans and investments in pools of trust-preferred securities. Loans and real estate that aren’t receiving interest increased 77 percent in the quarter to $988.6 million from the second quarter