Two shareholders of Long Island's North Side Savings Bank are fighting a deal to sell it - even though the stock price has risen.
A deal for North Fork Bancorp., based in Mattituck, N.Y., to buy Floral Park-based North Side was announced July 15. Just days later, two shareholders of $1.7 billion-asset North Side sued to block it.
Brian Barry and Marion Lord, who are seeking class-action status for separate but similar lawsuits, accuse North Side directors of self-dealing.
The suits charge they improperly accepted the North Fork offer without considering others, particularly one from Douglaston-based New York Bancorp.
New York Bancorp had acquired 7.84% of North Side stock and unsuccessfully lobbied North Side management to open merger talks.
Instead, one of the suits says, North Side instituted a shareholder- rights plan to prevent a hostile bid by New York Bancorp. Such a merger would "threaten the individual defendants' substantial compensation and/or perquisites associated with their service as senior executives and/or directors," the suit says.
The lawsuits say the price North Side accepted is too low. The plaintiffs seek unspecified damages.
North Side agreed to be acquired by $4.1 billion-asset North Fork for about $210 million in stock, or about 155% of projected book value at closing. The deal is expected to close in January.
North Side president and chief executive Thomas M. O'Brien called the suits "totally without merit" and said he thinks most shareholders are "pretty happy" with the deal and the stock's performance since it was announced.
The stock, which had been trading at about $35 per share before the announcement, was trading at $47 last week.
North Fork, the would-be buyer, was trading last week around $31 a share, slightly off its 52-week high.
North Fork officials, who disclosed the suit in the bank's quarterly report, said the allegations are baseless. "We don't consider these actions of any consequence, and we believe we'll prevail," said Daniel Healy, executive vice president.