Newspaper article The Record (Bergen County, NJ)

Bank Facing Suits over Sale Deal

Newspaper article The Record (Bergen County, NJ)

Bank Facing Suits over Sale Deal

Article excerpt

Englewood Cliffs-based ConnectOne Bancorp Inc. and its board members are being sued by shareholders who claim they are being shortchanged in the company's recent agreement to be purchased by larger Center Bancorp Inc. of Union Township.

Three lawsuits have been filed in state Superior Court in Bergen County since the deal was announced in January.

The complaints, likely to be consolidated, seek class-action status and a court order to block the deal, which is expected to be completed either late in the second quarter or early in the third.

The shareholders say ConnectOne board members accepted too small a price for the profitable, fast-growing community bank while negotiating top management jobs and seats on the board for themselves at the surviving company.

The plaintiffs also object to "lockup" provisions that would make it difficult for another buyer to step up with a better offer. These include the ConnectOne board's agreement not to solicit other bids and a promise to pay Center Bancorp a $10 million termination fee if the deal falls apart.

Clark Alpert of Windels Marx Lane & Mittendorf, ConnectOne Bancorp's lawyer, did not immediately respond to a request for comment. Neither did ConnectOne Chairman and Chief Executive Officer Frank Sorrentino III, nor his lawyer, Stuart Reiser of the Hackensack law firm Shapiro Croland Reiser Apfel & Di Iorio.

The agreed-to purchase price is 2.6 shares of Center Bancorp for each ConnectOne share. At the time of the Jan. 21 announcement, that formula valued ConnectOne at $243 million, or $45.60 a share, based on Center Bancorp's Jan. 17 closing price.

That $45.60-a-share price represented "a paltry premium of 14.5 percent over ConnectOne's market price," said a complaint from shareholder John Solak.

In 2013, the average price paid in bank mergers as a percentage of tangible book value -- the measure that investors most often focus on -- was 1. …

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