AKRON, Ohio (Legal Newsline) - Shareholders are suing board members of an Ohio bank holding company for trying to sell the company by means of an allegedly unfair process and for an allegedly unfair price.
Jack Wilkinson, for all others similarly situated and derivatively for public shareholders of FirstMerit Corporation, filed a class action lawsuit March 23 in U.S. District Court for the Northern District of Ohio Eastern Division against FirstMerit Corporation, FirstMerit's board of directors, Huntington Bancshares Inc., West Subsidiary Corporation, et al., alleging breach of fiduciary duty, aiding and abetting, and violations of the Securities Exchange Act.
On Jan. 26, the suit states, FirstMerit announced it had entered into an agreement to merge with West Subsidiary Corporation and become a wholly owned subsidiary of Huntington Bancshares. FirstMerit shareholders were to receive 1.72 shares of Huntington common stock and $5 in cash in exchange for each share of FirstMerit common stock owned at closing.
However, following the merger announcement, the complaint says, Huntington's trading price fell significantly, reaching a 52-week low of $7.83 per share, whereas its 52-week high was $21.49 per share. Because FirstMerit's board of directors did not negotiate for a collar, the actual value to be received by FirstMerit stockholders has significantly decreased, the lawsuit states.
The suit further alleges the defendants also filed a misleading statement with the Securities and Exchange Commission on March 4. The statement recommends that FirstMerit stockholders vote in favor of the proposed merger based on allegedly misleading information and without disclosing all material information. Specifically, the suit says, the statement does not disclose management projections that would reveal that the proposed merger price undervalues the company.
Wilkinson and others in the class seek jury trial, injunctive relief, rescinding of the merger agreement or granting rescissory damages, other damages, attorney fees and costs of the suit. They are represented by attorneys Christ T. Nolan of Perantinides & Nolan in Akron, and Shannon L. Hopkins of Levi & Korsinsky in Stamford, Connecticut.
U.S. District Court for the Northern District of Ohio Eastern Division Case number 5:16-CV-00723-SL