bank have voted down a $25 million buyout deal.
Penn Laurel Financial Corp. of Curwensville, Pa., had offered $45 a share in stock for Clearfield Bank and Trust Co., whose namesake town is just five miles away. But Omega Financial Corp. of State College, Pa., 43 miles away, is offering 44% more -- $65 in cash and stock.
Clearfield shareholders rejected the Penn Laurel deal, which their management had endorsed, in a vote last month. Clearfield made the tally public last week.
The deal, first announced in January, was to combine $132 million-asset Penn Laurel and $183 million-asset Clearfield to create an institution with a 25% market share in Clearfield County.
Neither Penn Laurel nor Clearfield officials returned calls seeking comment.
David B. Lee, president and chief executive officer of Omega, said he is interested in working out a deal as soon as Clearfield's agreement with Penn Laurel formally expires. That is to occur at the end of this month.
"We have felt from the beginning that our two companies would make a natural fit," he said. "They serve contiguous markets to where we serve, so a deal just makes a lot of sense."
After Clearfield's board ignored Omega's offer, Omega took its bid directly to shareholders.
Clearfield responded with a lawsuit and an Aug. 9 letter to shareholders. The letter responded to reports that the holders of about 16% of its shares had struck side deals with Omega.
Clearfield told shareholders that the deal with Penn Laurel had 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."
Ruling in late August on the lawsuit, a federal district court judge voided all agreements to sell Clearfield shares to Omega. That decision cleared the way for last month's vote on the Penn Laurel deal.
Omega's Mr. Lee said he intends to convince Clearfield's management that the two banks can work together.
"My company has been involved in a lot of mergers, and we have never been received this way before," he said. "We try to do right and not bully people."