Days after rejecting a takeover offer, Peekskill (N.Y.) Financial Corp. has been sued by a shareholder who is demanding that the company's board reconsider.
Peekskill last week rebuffed a $48.3 million-or $17.25 per share-cash offer from BRT Realty Trust, a Great Neck, N.Y., real estate investment trust. Instead, the thrift company plans to continue with its modified Dutch auction, which is in progress and set to expire Jan. 27.
Peekskill Financial is parent of First Federal Savings Bank, a $199 million-asset thrift.
In the suit, filed Monday afternoon in Delaware Chancery Court, plaintiff Michael Demetriou claimed that the company had failed in its fiduciary duty to consider all offers.
Mr. Demetriou, who owns an undisclosed number of shares, is asking the court to order Peekskill's board to evaluate the company's worth and to "explore thoroughly all available strategic alternatives which will lead to the best available" return. He also asked the court to prevent Peekskill from putting up "barriers" that would make the company less attractive to buyers.
The plaintiff is seeking class-action status on behalf of all Peekskill shareholders not affiliated with the company.
Mr. Demetriou's attorney, Joseph Rosenthal of Wilmington, Del., did not return calls seeking comment. However, in the suit, the plaintiff claimed that Peekskill had not adequately evaluated BRT's offer or pursued other offers, thus denying shareholders "the opportunity to enjoy a value- maximizing transaction at a substantial premium above the market price."
Meanwhile, BRT said on Wednesday that it is willing to increase its offer for Peekskill. No details of the offer were available, though BRT chairman Frederic Gould said he has requested a meeting with Peekskill to discuss terms.
Shares of Peekskill closed at $16 on Tuesday, down 25 cents. At midday Thursday the stock was trading at $16.50, up 62.5 cents for the day.
Eldorus Maynard, Peekskill's chairman, said in a statement that he believes the complaint is without merit. "Accordingly, the board intends to contest it vigorously," he said.
William J. LaCalamito, Peekskill's president, said in an interview that the company was not familiar with Mr. Demetriou and that it has had no previous run-ins with him.
He said the Dutch auction is proceeding as planned. The company has promised to buy back as many as 800,000 of its shares for up to $16.75 per share.