ASB Bancorp, First Bancorp Merger Sparks Securities Lawsuit

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ASB Bancorp, Inc., its board of directors, and First Bancorp (FBNC) are defendants in a lawsuit that claims they failed to fully inform stockholders of necessary information related to a proposed merger between ASB and First Bancorp. From the complaint:

“To the detriment of the Company's stockholders, the terms of the Merger Agreement substantially favor FBNC and are calculated to unreasonably dissuade potential suitors from making competing offers… Meanwhile, certain of the Company's officers and directors stand to receive significant benefits as a result of the Proposed Transaction.”

The suit argues that ASB’s registration statement fails to disclose details regarding the company’s financial projections and the valuation analyses performed by its financial advisor. As a result, shareholders have been deprived of the information they need to determine whether the deal is fair to them, the complaint says.

The plaintiff also argues that the defendants withheld information concerning potential conflicts of interest of the board of directors and the company’s financial advisor, claiming they may receive noteworthy compensation in the deal that would prevent them “from acting solely in the best interests of the Company’s stockholders.”