An investor group seeking to break up an acquisition deal for First Savings Bancorp in Southern Pines, N.C., has launched an all-cash counter-offer for the $325 million-asset company, a former banking executive leading the group said.

Though the new offer is higher, First Savings is expected to go ahead with its December deal with First Bancorp of Troy, N.C.

The investor group is led by Stanley J. Bradshaw, a former top executive with Mercantile Credit Corp. of St. Louis, a unit of Mercantile Bancorp. The group offered $23 in cash for each share of First Savings, or $80 million in all. That works out to 11% more than $535 million-asset First Bancorp agreed to pay.

The rival agreement with First Bancorp is "a heist," Mr. Bradshaw said. "First Bancorp is making out like a bandit, and First Savings is suffering. It's the queerest-looking situation I've ever seen."

First Savings executives did not return repeated calls for comment. Shares of First Savings closed at $18.625 on Tuesday.

Banks that sell to out-of-town suitors - Southern Pines is about 40 miles from Troy - typically receive a generous premium, Mr. Bradshaw said, but First Bancorp would be paying just 1.2 times book value.

"We're losing a local bank and we're losing our value also," he said. His group, Bradshaw Capital Management, owns 30,000 shares - less than 1% - of First Savings' stock. Though the thrift company has not officially rejected his offer, Mr. Bradshaw said he is certain it will be ignored. "I've been given no encouragement," he said.

Paul Miller, an analyst for Friedman, Billings, Ramsey in Arlington, Va., said he was also baffled about why First Savings would agree to such a low offer in one of the state's hottest markets. Though thrifts generally sell for less than banks, they fetched an average of 1.8 times times book value during 1999, according to Sheshunoff Information Services Inc.

"The low price doesn't make a lot of sense for the area they're in," Mr. Miller said.

He speculated that First Savings' board may have opted for the low offer in exchange for seats on First Bancorp's board. Such a move, he said, could lead to a bigger payday if First Bancorp eventually sells out.

"Basically, if the board wanted to keep their power, they would take a smaller offer," Mr. Miller said. "They're getting stock in bigger company, and these guys might hope if this company gets taken out down the line they can get a double bang."

Several shareholders expressed irritation at the board's refusal to entertain the higher bid, Mr. Miller said. Still, it would be difficult for them to block the deal with First Bancorp, because the board controls about 22% of First Savings' stock.

"There are some investors who are quite upset about this," Mr. Miller said, "but I would doubt it if [management] loses the vote, because they control so much."

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