Abington Bancorp Inc. in Jenkintown, Pa., has settled a shareholder lawsuit alleging that officers and directors had breached their fiduciary duty when they agreed to sell the company to Susquehanna Bancshares Inc. for $273 million in stock.
The $1.2 billion-asset Abington said in a Securities and Exchange Commission filing this week that that it agreed to settle "solely to avoid the costs, risks and uncertainties inherent in litigation."
Abington announced in January that it was selling itself to the $14 billion-asset Susquehanna of Lititz, Pa., for $12.80 a share, roughly 14% above Abington's share price at the time. Some shareholders complained that the price was inadequate and, in March, suits were filed in two separate Pennsylvania courts alleging that officers and directors violated their fiduciary duties by not negotiating a better deal.
The case in Montgomery County was dismissed last week. In the second suit, filed in the Court of Common Pleas, Philadelphia County, shareholders agreed to drop the suit in exchange for a settlement, including attorneys' fees, not to exceed $250,000. Abington also agreed to provide shareholders with additional information about the merger negotiations.
The acquisition is expected to close in May.