The deal to create the largest community bank in the state cleared a major hurdle last week.
Union First Market Bankshares’ pending acquisition of StellarOne Bank and its parent company was approved last week by state and federal regulators.
If consummated, the deal would result in a $7 billion bank with 140 branches covering much of Virginia and with its headquarters in downtown Richmond. The acquisition is valued at about $445 million, and StellarOne shareholders would receive 0.97 shares of Union common stock for each of their StellarOne shares.
The deal is on track to be completed by January. Union chief executive Billy Beale said the next step in the process is a vote by both companies’ shareholders, which is expected in December.
But there’s at least one shareholder that isn’t happy about the move.
A class action lawsuit was filed June 14 – a few days after the deal was unveiled – against StellarOne, its board of directors and Richmond-based Union First Market, seeking either to block the transaction or to win damages.
The case alleges that StellarOne Corp., the Charlottesville-based parent of StellarOne Bank, and 13 of its directors breached their fiduciary duty to shareholders by engaging in the pending deal with Union. It argues that the merger process was flawed and that the deal would “unfairly deprive” StellarOne shareholders of the true value of their investment in the bank. Such suits are common in the early stages of larger merger and acquisition deals.
Union is named in the suit on a single count of aiding and abetting the alleged breach of fiduciary duty. Both banks have argued in court for the suit to be tossed out. The case is pending in Richmond federal court.
One local banking M&A deal has already moved quickly to completion this year. C&F Corp.’s acquisition of Central Virginia Bankshares was finalized Oct. 1, just four months after it was made public.