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Activist Metro investor: Company’s ‘poison pill’ is ‘entrenchment’

Metro Bancorp Inc. didn’t mention any specific investor when it announced this week it had drafted a new shareholders rights policy protecting them in the event of a takeover.

The principals of activist Chicago-based PL Capital LLC, however, see the finger of Metro’s “poison pill” pointed squarely at them.

Both of the investment company’s principals, Richard Lashley and John Palmer, lashed out at Metro for adopting the new policy as PL Capital has acquired a higher stake in Metro and has engaged in a proxy battle to grab two seats on Metro’s board of directors.

PL Capital said the shareholders rights policy “further entrenches” the board and management teams against PL Capital in the proxy battle.

“We are disappointed that the board and management team are wasting shareholders’ money on legal fees, rather than focusing on improving the (c)ompany,” Palmer said in a news release late Wednesday. “A poison pill of this type is unusual and unnecessary in a regulated industry such as banking.”

Earlier this week, Metro adopted a shareholders rights policy that goes into effect when any person or company acquires 15 percent or more of its common stock.

The company said in a news release it adopted the policy because of “recent accumulations of significant portions of Metro Bancorp’s common stock.”

Last spring, PL Capital increased its stock holdings in Swatara Township-based Metro to 8.4 percent from 5.24 percent of the company’s stock, according to filings with the Securities and Exchange Commission. Currently, it owns 8.8 percent of the company’s common stock, according to a news release.

Since then, PL Capital, an activist investment group, has called for Metro to be sold to realize current stock value and has made two nominations for the board of directors to be voted on at this year’s annual meeting of shareholders.

PL Capital is one of three activist Metro investors that has gone public with its hopes the company would look to be acquired.

“I’m not even sure why Metro appears to be panicking at the prospect of having two new very knowledgeable and independent board members that will only be two of 11 directors,” Lashley said. “Rather than adopting entrenchment policies, Metro should be working to ensure that the election process provides shareholders with the right to choose who will best represent them in the boardroom.”

Metro Bancorp officials provided a statement Thursday morning, though it did not directly address PL Capital’s claims:

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“Our (b)oard of (d)irectors adopted the rights agreement, which will expire in one year, in response to recent accumulations of significant portions of Metro Bancorp’s (c)ommon (s)tock. The rights agreement, which is similar to plans adopted by numerous publicly traded companies, is intended to protect the interests of all of our shareholders and allow them to realize the long-term value of their investment. Our (b)oard and management team are committed to continuing to act in the best interests of the (c)ompany and its shareholders in order to enhance value.”

The company, the holding company for Metro Bank, has about $3 billion in assets and trades on the NASDAQ exchange under the ticker symbol METR.

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Michael Sadowski

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