Continuing its expansion drive in its home state, First Merchants Corp. of Muncie, Ind., announced last week that it would buy Decatur Financial Inc. for $33.2 million of stock.First Merchants, with $1.4 billion of assets, would exchange 9.13 shares of its common stock for each share of Decatur, which has $128 million of assets. The deal would be worth about $225 a share, or 2.3 times Decatur's book value, on the basis of First Merchants' stock price at midday Monday.

First Merchants also offered Decatur shareholders the option of taking $237 a share in cash. If more than 40% of them choose this option, First Merchants would pay out a combination of stock and cash, the company said.

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