A handful of law firms said they were investigating the board of First Franklin Corp. of Cincinnati for potentially breaching fiduciary duties related to the bank's proposed sale, announced Wednesday, to Cheviot Financial Corp. of Cincinnati.
The firms are questioning whether First Franklin's board of directors conducted a fair sales process before it agreed to be acquired by Cheviot and whether the $24.4 million offer price undervalues the company, thereby hurting its shareholders' stake.
Cheviot agreed to acquire First Franklin shares for $14.50 apiece in cash. The offer was an 85% premium to Franklin's closing price of $7.82 a share Tuesday and exceeded the company's book value of $12.95 per share as of June 30.
First Franklin has not publicly responded to the law firms' investigations.
Cheviot declined to comment.
The firms that said they are investigating the deal include Faruqi & Faruqi LLP, Levetown & Jenkins LLP, Levi & Korsinsky LLP, Ryan & Maniskas LLP and Rigrodsky & Long PA.
The deal, which is expected to close next quarter, would nearly double the size of Cheviot, which had $351 million of assets as of June 30. First Franklin has $281 million of assets.
