A C1 Bank shareholder thinks the company got a bum deal in its acquisition by Bank of the Ozarks. The Arkansas-based company is purchasing C1 for $402.5 million. That translates to about $25 per share.
A shareholder by the name of Roger Mariani filed a class-action lawsuit in Pinellas County courts on Monday alleging the terms of the deal were selfishly approved by C1 Bank CEO Trevor Burgess and his board of directors, which includes former Florida Chief Financial Officer Alex Sink.
In Mariani’s suit he alleges the agreement process was undemocratic and that the directors were “attempting to lock up the proposed transaction with deal protection devices that preclude other bidders from making a successful competing offer.”
In other words, the company could have held out for more money.
These kinds of lawsuits are not uncommon when companies merge or are sold. Entire firms exist to represent shareholders in such transactions. According to the Mergers & Acquisitions Law Center, “The ultimate goal of a merger and acquisition lawsuit is to ensure that a potential deal is fair for all of the shareholders of the company.”
The Center argues that deals are often “hashed out by a “good old boy” network of corporate chieftains without much accountability or regard for the interests of shareholders.”
C1 Bank announced the sale last month. The St. Pete-based community bank is worth $1.7 billion. There are 32 branches across the state. It’s the 18th largest bank in Florida with branches concentrated in the largest metropolitan areas. C1 Bank recently signed the Tampa Bay Buccaneers on as clients.
Under the terms of the purchase, Burgess will stay on as chief innovation officer and president of the bank’s Florida operations.
The lawsuit filed against Burgess, Sink and the rest of the bank’s board of directors seeks to halt the sale in favor of a better deal. If that isn’t done, Mariani will seek damages.
