SAN DIEGO and ALMA, Mich., Aug. 16, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of Firstbank Corporation (NASDAQ: FBMI) ("Firstbank") by Mercantile Bank Corporation (NASDAQ: MBWM) ("Mercantile Bank"). On August 15, 2013, Firstbank and Mercantile Bank announced the signing of a definitive merger agreement whereby Firstbank shareholders will receive 1.0 shares of Mercantile Bank stock for each share of Firstbank stock, an equivalent of $18.77 per share. The merger is expected to close by December 31, 2013.
Is the Merger Best for Firstbank and Its Shareholders?
Robbins Arroyo LLP's investigation focuses on whether the board of directors at Firstbank is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger. The $18.77 merger consideration represents a premium of only 12.67% based on Firstbank's closing price on August 14, 2013, the last day prior to the announcement of the merger. The 12.67% premium is substantially below the average premium of 28.21% for comparable transactions over the past three years.In addition, on July 22, 2013, the company announced its financial results for the second quarter 2013. Notably, earnings per share of $.38 were 52% over the $.25 earnings per share of second quarter 2012. Further, Firstbank exceeded analyst earnings per share, net income, and sales expectations in seven of the last eight quarters. In response to the positive financial report, Thomas R. Sullivan, President and Chief Executive Officer of Firstbank, stated that: "The second quarter of 2013 saw significant progress for our company," noting "[w]ith the growth in loans, we saw the first quarterly increase in our yield on earning assets since the third quarter 2007." Given these facts, Robbins Arroyo is examining Firstbank's board of directors' decision to sell the company to Mercantile Bank now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.
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