City National, “Hollywood’s Banker,” to Merge With Royal Bank of Canada
The bank is famous for helping Frank Sinatra retrieve his kidnapped son.
City National, known to some as "bank to the stars" or "Hollywood's banker," has agreed to be acquired for $5.4 billion by the Royal Bank of Canada, the two companies said on Thursday.
The cash and stock deal values City National at $93.80 per share, a 26 percent premium to where the stock closed on Wednesday.
After the merger, RBC will combine its U.S. wealth management business with City National and the entity will be run by Russell Goldsmith, who has been CEO of City National since 1995. Goldsmith also is an entertainment veteran, having been CEO of Republic Pictures and COO of Lorimar.
City National was founded six decades ago by a group that included Columbia Pictures board member Al Hart, who became City National's first CEO.
When Frank Sinatra's son was kidnapped in the 1960s, the legendary entertainer phoned Hart for help, and the banker quickly gathered $240,000 in marked bills to pay the ransom. Frank Sinatra Jr. was returned, the kidnappers were captured and City National's reputation in the entertainment industry soared.
In the 1980s, the bank's entertainment division got into film financing by offering bridge loans for the production of such films as The Silence of the Lambs and Driving Miss Daisy.
City National also is the official bank of the Tony Awards, and it has provided services to Broadway shows including The Book of Mormon. It also is a major provider of financial services to the music industry.
"The entertainment industry has always been a key focus of City National Bank. We got famous for that when we helped Frank Sinatra deal with the kidnapping of his son, and over the years, we just continued to do more and more in the industry," Goldsmith said.
City National is a $32 billion bank and Goldsmith says about 25 percent of its clients are connected to the entertainment industry.
RBC's Canadian media and entertainment unit also provides interim production loans to film producers and has given credit lines to such companies as Lionsgate, MGM and Imax.
Goldsmith said the only change he foresees as a result of the merger is international expansion, including a bigger presence in the U.K.
"Part of what is exciting about merging with RBC is that, where City National today is the premier entertainment bank in the U.S., I think over time we're going to be able to be the premier entertainment bank in the English-speaking world," he said. "RBC is very, very strong in Vancouver and Toronto, where there is so much entertainment production today."