Acquisition of LNB Bancorp Inc. (LNBB) by Northwest Bancshares Inc. (NWBI) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of LNB Bancorp, Inc. (NASDAQ: LNBB) by Northwest Bancshares, Inc. (NASDAQ: NWBI). On December 15, 2014, the two companies announced the signing of a definitive merger agreement. Under the terms of the agreement, LNB Bancorp shareholders will receive $18.64 for each share of LNB Bancorp common stock.
Is the Proposed Acquisition Best for LNB Bancorp and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at LNB Bancorp is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $18.64 merger consideration represents a premium of only 7.9% based on LNB Bancorp’s closing price on December 12, 2014. This premium is significantly below the average one-day premium of 42.4% for comparable transactions within the past year.
On October 29, 2014, LNB Bancorp released its earnings results for its third quarter 2014, reporting strong quarterly earnings. Specifically, LNB Bancorp reported net income available to common shareholders of $2.1 million, a 48% year-over-year increase. In addition, the company reported loan increases of $15.1 million, or 6.7% annualized during the quarter, as well as a 36% increase in noninterest income from higher gains on sale of loans and improved trust income. In commenting on these results, LNB Bancorp President and Chief Executive Officer Daneil E. Klimas remarked, “Overall, we are very pleased with the third quarter results. We’ve seen solid loan growth and improvement in credit quality continued, reducing charge-offs and the provision for loan losses.”
In light of these facts, Robbins LLP is examining LNB Bancorp’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
LNB Bancorp shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information. LNB Bancorp shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.