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Franklin Financial Corp (NASDAQ:FRNK) Investor Files Lawsuit Over Alleged Wrongdoing In Takeover By TowneBank

  • If you purchased shares of Franklin Financial Corp (NASDAQ:FRNK) and currently hold any of those NASDAQ:FRNK shares, you have certain options and you should contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Company
Franklin Financial Corp
Security
NASDAQ: FRNK

Case Name
Franklin Financial Deal Case 10/03/2014
Type of Lawsuit
Mergers and Acquisition
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Summary

October 07, 2014 (Shareholders Foundation) - An investor, who currently holds shares of Franklin Financial Corp (NASDAQ:FRNK), filed a lawsuit in effort to halt the proposed takeover of Franklin Financial Corp by TowneBank for a value of approximately $23.04 per share.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:FRNK stockholders by agreeing to sell Franklin Financial Corp too cheaply via an unfair process to TowneBank.

On July 15, 2014, TowneBank (NASDAQ: TOWN) and Franklin Financial Corporation (NASDAQ: FRNK) announced the signing of a definitive merger agreement pursuant to which TowneBank will acquire Franklin Financial Corp (NASDAQ:FRNK). Under the terms of the agreement, common shareholders of Franklin Financial Corp (NASDAQ:FRNK) will receive 1.40 shares of TowneBank common stock for each share of Franklin. This implies a deal value per NASDAQ:FRNK share of $23.04 or approximately $275 million based on TowneBank's closing stock price of $16.46 on Monday, July 14, 2014.

However, the plaintiff claims that the offer is too low and undervalues Franklin Financial Corporation. Indeed, NASDAQ:FRNK shares traded as recently as July 2, 2014, as high as $24.60 per share in the open market. In addition, Franklin Financial Corp reported that its Total Net Income rose from $1.43 million for the 12 months period that ended on Sept. 30, 2011 to $9.35 million for the 12 months period that ended on Sept. 30, 2013. Shares of Franklin Financial Corp (NASDAQ:FRNK) grew from $10.90 per share in November 2011 to as high as $24.60 per share on July 2, 2014. Furthermore, the plaintiff alleges that the process is also unfair to NASDAQ:FRNK stockholders.

On October 6, 2014, NASDAQ:FRNK shares closed at $18.80 per share.