Shares of BNCCorp (BNCC) soared Tuesday after the Bismarck, N.D., company announced that it was terminating a planned stock sale that threatened to dilute investors' holdings.

The $696 million-asset company announced the decision late Friday - just hours after a law firm disclosed that it was investigating a possible breach of fiduciary duty on behalf of a BNCCorp shareholder. BNCCorp, the parent of BNC National Bank, did not state a reason for withdrawing the offering.

BNCCorp said in February that it would sell 9.2 million shares of common stock to unnamed investors for the highly discounted price of $17 million, or about $1.85 per share.

The offering would have increased the company's outstanding common shares from 3.3 million to 12.5 million. After the private placement was announced on Feb. 16, BNCCorp's stock price fell roughly 45% from the previous day's closing. Its shares were trading at $5 Tuesday morning, up more than 69% from Friday's closing.

Early Friday, the law firm William N. Charouhis & Associates had announced that had been hired by a shareholder to investigate board's decision to pursue a stock sale. It said it would "explore options available that could preserve value for current shareholders," such as seeking a shareholder vote to approve or reject the offering, conducting a proxy solicitation to replace the board and sell BNCCorp in an auction or filing a class action lawsuit on behalf of shareholders.

The law firm said Tuesday that it would continue the investigation until an appropriate course could be determined.

BNCCorp had intended to use the funds from the offering for a variety of purposes, including the repayment of accrued and unpaid dividends and interest on outstanding preferred stock and trust preferred securities and the redemption of its outstanding preferred stock.

It said Friday that it would return all subscription funds deposited into escrow by the investors in connection with the offering.

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