First Niagara Financial Group Inc announced on Monday, July 27, 2009 to acquire Harleysville National Corporation for $237 million in an all stock deal. Immediately several Investigations on behalf of current investors of Harleysville National Corporation (Public, NASDAQ:HNBC), who purchased the shares before July 27, 2009, over potential breaches of fiduciary duty and other violations of state law in connection with an alleged unfair takeover price were announced.

The investigations by law firms focus on potential breaches of fiduciary duty and other violations of state law by the Board of Directors of Harleysville National Corporation arising out of their attempt to sell Harleysville National to First Niagara Financial Group. First Niagara announced in a press release that First Niagara has agreed to acquire the Philadelphia-area financial services company Harleysville National Corporation (NASDAQ: HNBC) in an all-stock transaction valued at approximately $237 million or $5.50 per share. According to First Niagara Financial Group each Harleysville shareholder will receive 0.474 shares of First Niagara common stock for each Harleysville share owned, representing a premium of about 37.5% based on the Pennsylvania bank's closing price on July 24, 2009 of $4.00 per share.

But according to one investigation the transaction appears to be unfair to current investors of Harleysville National Corporation (Public, NASDAQ:HNBC) given the fact the shares of Harleysville National (NASDAQ:HNBC) traded as high as $9.86 per share on April 21, 2009. Another investigation concerns whether the Harleysville Board of Directors breached their fiduciary duties to Harleysville shareholders given that (i) the Company's shares traded at $6.47 as recently as June 5, 2009 and over $14.50 per share in January 2009; (ii) the Company has a book value of over $11.00 per share; and (iii) because the Company agreed to a non-solicitation provision and a termination fee of $10.0 million that will all but ensure that no superior offer will ever be forthcoming.

Harleysville National Corporation, located in Harleysville, PA, is the parent bank holding company of Harleysville National Bank and Trust Company, a wholly owned subsidiary of the Company. Harleysville National Bank and Trust Company provides a range of banking services, including loans and deposits, investment management and trust and investment advisory services to individual and corporate customers located primarily in eastern Pennsylvania. Shares of Harleysville National Corp (Public, NASDAQ:HNBC) traded at $5.49 per share after the announcement, down from a 52weekHigh of $20.60 per share and almost $15 per share in the beginning of 2009. Harleysville National had in 2007 Total Assets of $3.903billion with a Net Income of $26.59million and in 2008 Total Assets of $.549051billion with a Net Income of $25.09million.