An investigation on behalf of current investors of NewAlliance Bancshares, Inc. (NYSE:NAL) concerning potential breaches of fiduciary duty by the NAL board of directors in connection with the announced merger between New Alliance Bancshares, Inc and First Niagara Financial Group, Inc. was announced.
NewAlliance Bancshares, Inc, located in New Haven, CT, is the bank holding company of its wholly owned subsidiary, NewAlliance Bank. NewAlliance Bank provides commercial banking, retail banking, consumer financing, trust and investment services through 89 banking offices and 105 automated teller machines. NewAlliance Bancshares had in 2006 $7.2477billion in Total Assets, in 2007 $8.21098billion, in 2008 $8.2995billion, and in 2009 $8.43431billion. NewAlliance Bancshares Net Income was in three out of four past year constantly around $45million.
On Thursday, August 19, 2010, NewAlliance Bancshares, Inc. (NYSE:NAL) and First Niagara Financial Group, Inc. (Nasdaq:FNFG) announced that the companies entered into a merger agreement, valued on a fixed exchange ratio of 1.10 shares of First Niagara stock for each NewAlliance share. Per yesterday's close, this represents $14.09 per NewAlliance share, or an approximate total transaction value of $1.5 billion, including transaction expenses.
According to NewAlliance Bancshares, Inc its board of directors has approved the transaction and per yesterday's close, the approximate blended value of the stock and cash consideration is $14.09 per share and this represents a premium of approximately 24% based on NewAlliance's closing price of $11.36, and a premium of about 19% over NewAlliance's 52-week average closing price, on August 18, 2010.
Shares of NewAlliance Bancshares, Inc. (NYSE:NAL) traded at roughly $11.50 per share days before the announcement and started trading on Thursday at over $13 per share. But NAL shares traded as high as high as $13.26 per share as recent as May 03, 2010, and as High as $13.26 per share on April 29, 2010. During 2008 NAL stocks traded as high as $16 per share, and during 2007 at almost $17 per share.
The investigation by a law firm concerns whether First Niagara Financial Group, Inc., as well as the directors of New Alliance Bancshares breached their fiduciary duties by not acting in NewAlliance Bancshares, Inc. (NYSE:NAL) shareholders' best interests in connection with the sale process of New Alliance Bancshares, Inc whether the NewAlliance Bancshares, Inc. Board of Directors breached their fiduciary duty to NewAlliance Bancshares (NYSE:NAL) stockholders by failing to adequately shop the Company prior to entering into the agreement, whether the Board of Directors breach their fiduciary duties by not seeking a deal that will provide better value NewAlliance Bancshares, Inc, and whether First Niagara Financial Group, Inc. is underpaying for NewAlliance Bancshares (NAL), thus unlawfully harming NAL stockholders.