Great Western Bancorp's stock soars on buyout deal with First Interstate valued at $2.0 billion

Shares of Great Western Bancorp Inc. soared 11.9% in premarket trading Thursday, after the South Dakota-based bank announced an agreement to be acquired by Montana-based First Interstate BancSystem Inc. /zigman2/quotes/208790106/composite FIBK +3.28% in an all-stock deal valued at $2.0 billion. Under terms of the deal, Great Western shareholders will receive 0.8425 First Interstate shares for each Great Western share they own. First Interstate's stock was still inactive in the premarket. Based on Wednesday's stock closing prices, the deal terms value Great Western shares at $35.655 each, or a 24.7% premium. First Interstate said it expects the deal, which is expected to close in the first quarter of 2022, to be 20% accretive to earnings per share in 2023. "We'll be able to offer customers access to additional branch locations and new products and services, provide new growth and professional development opportunities to our employees, deliver additional returns to our shareholders, and have an even greater impact on our communities," said Great Western Chief Executive Mark Borrecco. Shares of Great Western have tumbled 17.5% over the past three months and First Interstate have lost 6.3%, while the SPDR S&P Regional Banking ETF /zigman2/quotes/200108291/composite KRE +5.52% has declined 7.9% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.69% has gained 6.1%.