A western Pennsylvania community bank's plan to derail the proposed merger of two rivals has been dealt a blow by a federal judge.
Last month, Omega Financial Corp. in State College announced an unsolicited offer to buy Clearfield (Pa.) Bank & Trust Co. Omega, which has $1.1 billion of assets, offered Clearfield investors $65 per share.
However, $183 million-asset Clearfield had already signed an agreement to merge with Penn Laurel Financial Corp., a Curwensville, Pa.-based company that had offered $48.50 per share.
Omega said at the time that some Clearfield shareholders had agreed to sell Omega their shares.
But last week, a Federal District Court judge in Pittsburgh voided any agreement between shareholders and Omega, saying that Omega withheld information. Specifically, the judge ruled that Omega had failed to explain to shareholders that they could not vote on Clearfield's deal with $137 million-asset Penn Laurel if they had already agreed to sell their shares to Omega.
Clearfield's board must now set a date for shareholders to vote on its merger with Penn Laurel. It is unclear when that deal, which was announced in January, might close. -- Louis Whiteman