Donegal Financial Services Corp. and Union National Financial Corp. said they have amended their acquisition agreement after Donegal Financial's stock price fell $3.86 a share since the deal was announced in April.
The amendment, announced Wednesday, increases the cash portion of the stock exchange for shareholders of Union National, the Lancaster, Pa., company that owns the $500 million-asset Union National Community Bank. Donegal Financial of Marietta, Pa., is acquiring Union National.
Donegal Financial is owned by Donegal Group Inc. and Donegal Mutual Insurance Co. The deal would combine Donegal Financial's banking subsidiary, Province Bank FSB, with Union National Community Bank, creating a $600 million-asset community bank in Lancaster County.
The deal's pricing was changed after Donegal Group's shares fell from $14.68 a share April 19 to $10.82 a share Aug. 30.
The agreement now stipulates that Union National shareholders will receive at least $5.05 in cash a share and no more than $5.90 a share, as long as Donegal's stock trades between $11 and $15 a share five days before closing. The deal is expected to close in the fourth quarter.