Frontier Financial Corporation board of director faces shareholder investigation

If you are currently an investor in shares of Frontier Financial Corporation (NASDAQ:FTBK), and purchased the shares before July 31, 2009, and / or have additional information relating to the investigation, you should contact the Shareholders Foundation

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Company Name(s): 
Frontier Financial
Affected Securities: 
NASDAQ: FTBK

An investigation on behalf of current investors Frontier Financial Corporation (Public, NASDAQ:FTBK), who purchased the shares before July 31, 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 Frontier Financial Corporation (NASDAQ:FTBK) arising out of their attempt to sell Frontier Financial to SP Acquisition Holdings, Inc..

Frontier Financial Corporation (NASDAQ: FTBK) and SP Acquisition Holdings, Inc. (NYSE Amex: DSP) announced on July 31, 2009 that they have entered into an Agreement and Plan of Merger, pursuant to which Frontier will merge with, and into, SPAH. Frontier Financial Corp. announced that under the terms of the merger agreement, each share of Frontier Financial Corp's common stock(NASDAQ:FTBK) outstanding will be exchanged for the right to receive 0.0530 shares of SP Acquisition Holdings, Inc common stock (NYSE Amex: DSP) and 0.0530 SP Acquisition Holdings, Inc warrants upon completion of the merger. The closing price of SP Acquisition Holdings, Inc common stock (NYSE Amex: DSP) common stock on July 30, 2009, the day before the merger was announced, was $9.75 per share.

But according to an investigation by a law firm “the transaction appears to be unfair” to current investors of Frontier Financial Corporation (NASDAQ:FTBK). According to another investigation the investigation “concerns whether the Frontier Financial Board of Directors breached their fiduciary duties to Frontier Financial shareholders given that (i) the Company's shares traded at $3.00 as recently as May 12, 2009 and traded at a 52-week high of over $20.00 per share; (ii) the Company has a book value of over $5.71 per share; (iii) SPAH shares have always traded below $10.00 per share and substantially lower than the exercise price of the SPAH warrants Frontier Financial shareholders are to receive; and (iv) because the Company agreed to a termination fee of $2.5 million that will all but ensure that no superior offer will ever be forthcoming”.

Frontier Financial Corporation, located in Everett, WA, is a bank holding company. Frontier has one subsidiary: Frontier Bank (the Bank), which is engaged in a general banking business and in businesses related to banking. The Bank is engaged in general banking business in Washington and Oregon, including the acceptance of demand, time and savings deposits and the origination of loans. Frontier Financial Corp. had in 2007 Total Assets of $3.99569billion and a Net Income of $73.94million and in 2008 Total Assets of $4.10444billion. Shares of Frontier Financial Corp (NASDAQ:FTBK) traded between $0.80 and $0.75 per share after the announcement and at $1.1 per share shortly before the announcement. Frontier Financial Corporation (NASDAQ:FTBK) shares were down from a $52weekHigh of $20.99 per share and over $30 per share in 2006.