Sterling Bancshares, Inc. Investor Investigations Question Potential Unfairness Of Takeover Proposal

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Company Name(s): 
Sterling Bancshares
Affected Securities: 

After Sterling Bancshares, Inc. announced that its board of directors agreed to a takeover of Sterling Bancshares by Comerica Incorporated investigations on behalf of investors in Sterling Bancshares, Inc. (NASDAQ:SBIB) question whether the offer and the sale process are unfair to SBIB investors.

The investigations by law firms concern whether certain officers and directors at Sterling Bancshares, Inc. breached their fiduciary duty owed to the shareholders of Sterling Bancshares, Inc. (NASDAQ:SBIB) arising out of their attempt to sell Sterling Bancshares to Comerica Incorporated

On Tuesday, Jan 18, 2011, Sterling Bancshares, Inc. (Nasdaq: SBIB) and Comerica Incorporated (NYSE: CMA) announced that they have entered into an agreement under which Comerica Inc. will acquire all of the outstanding shares of common stock of Sterling Bancshares in a stock-for-stock transaction. Under terms of the agreement, each outstanding share of Sterling Bancshares common stock (SBIBI) will be exchanged for 0.2365 shares of Comerica Inc (CMA) common stock upon closing. Based on Comerica's 15-day average NYSE closing common share price through January 11, 2011 of $42.28, the transaction values each share of Sterling common stock at $10.00, or an aggregate implied value of approximately $1,027 million in Comerica common shares.

But SBIB shares traded during 2008 at $14 per share, and during 2007 several times over $12 per share. Thus the investigations seek to determine whether Sterling Bancshares, Inc. and certain of its officers and directors breached their fiduciary duties owed to Sterling Bancshares, Inc. (NASDAQ:SBIB) investors by rushing into the transaction and failing to undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Sterling Bancshares (SBIB), specifically by entering into any transaction before adequately shop the Company. Thus a potential class action lawsuit would seek to maximize the amount of money and information SBIB shareholders would receive in a buyout, so one law firm.