MainStreet Financial Corp. hired an investment bank to advise on its proposed sale to BB&T Corp. just days after the investment bank agreed to sell to BB&T.
MainStreet's chairman, Michael R. Brenan, hired Scott & Stringfellow Financial Corp. on Aug. 17, seven days after the company agreed to sell itself to BB&T for $131 million.
A proxy statement filed last week with the Securities and Exchange Commission said Mr. Brenan hired the firm "based on his belief that Scott & Stringfellow could render independent advice to MainStreet, notwithstanding that it had agreed to be acquired by BB&T."
Scott & Stringfellow said in the proxy that BB&T had "no input" in determining whether MainStreet shareholders were getting a fair price.
The MainStreet board consented to hiring Scott & Stringfellow but insisted that Sandler O'Neill & Partners be brought on to give a second opinion. The board "focused particular attention" on the Sandler O'Neill opinion, according to the filing. MainStreet agreed to sell to BB&T on Aug. 26 in a deal currently valued at $626 million.
Sandler O'Neill will collect a $300,000 fee for its services, and Scott & Stringfellow stands to get $3 million.