A group of shareholders led by a New Hampshire family has killed a merger between their small bank and a Massachusetts thrift.

The Fineman family led a shareholder revolt against the proposed acquisition of Finest Financial Corp. by Andover Bancorp. The family and its followers claimed that the price offered by Andover wasn't high enough and that the bank wanted to remain independent.

The family also complained that there wasn't enough protection in the proposal for the company's current employees.

"The employees are more like family," said Neil S. Fineman, who was the only Finest director to vote against the merger. "They'd been there for 15 to 20 years, and we didn't feel there was enough protection for them."

Pelham Bank and Trust Co., Finest's subsidiary, was founded 26 years ago by Louis Fineman, who died in March.

Gerald T. Mulligan, president and chief executive of Andover, dismissed the concern over Finest employees, saying Andover had promised to hire all of Finest's employees, operate Pelham as a separate New Hampshire subsidiary, and not close any of Finest's branches.

"That was never an issue in this deal," Mr. Mulligan said. "That's something they've come up with since the shareholder vote. It was not mentioned in any letters opposing the vote, and it was not mentioned at the shareholders meeting."

Andover officials expect to post a $1.1 million charge in the second quarter for expenses related to the failed deal.

Frank J. Barkocy, senior vice president at Advest Inc., questioned the Finemans' stated reasons for rejecting the merger. He called the vote a sign of a "deeper issue of wanting to run the institution a bit further going forward as an independent rather than take advantage of the offer that was on the table."

"The Fineman family decided that they did not want to be acquired and wanted to remain independent," he said.

Mr. Mulligan was angered over the collapse of a deal that he said was initiated by Finest's former chairman, Louis Fineman, but fell through despite Andover's efforts to placate the concerns of the Fineman family.

Andover had sweetened its original September 1994 offer, raising the price from $19.9 million in stock to $21 million in cash and stock.

But Neil Fineman said that while his father had at one time supported selling the institution, "this wasn't the deal he would have agreed on."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.