Advance America (NYSE:AEA)
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Mexican retail and financial firm Grupo Elektra SAB (ELEKTRA.MX) said late Wednesday it plans to buy South Carolina-based lender Advance America Cash Advance Centers Inc. (AEA) for $780 million.
The deal, Elektra's first major foray into the U.S. financial services market, values Advance America at $10.50 per share--a 32.7% premium over the company's closing price Wednesday, Elektra said in a statement.
Advance America offers cash advance services through approximately 2,600 locations in 29 U.S. states, the United Kingdom, and Canada.
"We are eager to expand our services to the United States and to continue meeting the needs of the financially under-served," said Elektra Chairman Ricardo Salinas.
Elektra sells items such as appliances on credit, while also offering banking services. In addition to Mexico, the company operates in Argentina, Brazil, El Salvador, Guatemala, Honduras, Panama and Peru.
Under the terms of the agreement, Advance America may solicit acquisition proposals from third parties for a period of 45 days.
Should no competing proposal arise, the transaction is expected to close during the first half of 2012.
Key management at Advance America are expected to stay on at the company following the acquisition, working from Spartanburg, S.C.
Elektra plans to finance the transaction with cash and credit.
-By Amy Guthrie, Dow Jones Newswires; firstname.lastname@example.org