headed for the altar and a larger rival that would like to break them up.

Clearfield (Pa.) Bank and Trust Co. announced in January that it was merging with Penn Laurel Financial Corp., a similar-size company based just 10 miles down the road in Curwensville. But the deal has been held up since Omega Financial Corp. in State College swooped in and offered a better price for Clearfield's shares.

Omega, which at $1.1 billion of assets is six times the size of either merger partner, took its case to Clearfield's shareholders early this month after waiting nearly three months and getting no response from the company's board. Clearfield's directors have warned investors not to trust Omega's offer and said that their bank would be weakened by ownership by an "out-of-towner" company. Omega is headquartered 43 miles away.

Clearfield has also filed suit against Omega claiming it illegally solicited investors.

Principals from the three companies did not return calls seeking comments. But documents filed by Penn Laurel with the Securities and Exchange Commission this week tell much of the story.

In January the two smaller bank companies announced a merger-of-equals deal that called for Penn Laurel to exchange 0.97 shares -- or about $48.50 worth, according to Tuesday's closing price -- of its common stock for each share of Clearfield, which has $183 million of assets. The new company, which would have about $320 million of assets, was to keep the Penn Laurel name, but Clearfield shareholders would own about 60% of its stock. Executives from both banks would make up the new company's management team.

On May 10, however, Clearfield's board received a letter from Omega proposing to buy the company. At a meeting later that month, according to the filing, Clearfield's board "determined not to respond to the letter and reaffirmed its commitment to complete its merger with Penn Laurel."

But instead of taking no for an answer, Omega went directly to shareholders, according to the SEC filings. The report said Omega held a meeting Aug. 2 with about 30 Clearfield investors who own about 16% of the company's shares, offering $65 per share and asking them to sign an agreement to push for the deal.

At least some of the investors signed, SEC documents said.

On Aug. 9, Clearfield responded with a letter to all shareholders urging them to reject Omega's offer. They said that because Omega's proposal is short on details and not binding, it could not be seriously considered, adding that the Penn Laurel deal has extra value because "the creation of a strong community bank will benefit shareholders, its customers, and the community more than the alternative of being acquired by a larger, out-of-town institution."

Clearfield sued Omega on Aug. 12 in District Court for Western Pennsylvania.

The Penn Laurel deal was originally slated to close during the second quarter. Now the companies hope to win shareholder approval at Sept. 8 meetings and close it soon after.

Penn Laurel and Clearfield are paying a shareholder communications company $13,000 to make sure investors know about the meetings.

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