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Farmers & Merchants beat rival for Limberlost with 'superior' bid

Farmers & Merchants Bancorp Inc. had another rival for Limberlost Bancshares Inc., but the former eventually won the bid with its "superior" proposal.

Three parties, including Archbold, Ohio-based Farmers & Merchants, signed confidentiality agreements in the week of May 14 and were allowed access to a virtual data room containing financial and operating information on Geneva, Ind.-based Limberlost, which had been looking for a potential partner. During the week of June 18, Farmers & Merchants and another party provided indications of interest.

Farmers & Merchants was invited to conduct off-site due diligence, based on the "superiority of its proposal" and expectation that it would be a good fit for Limberlost. Farmers & Merchants on July 5 submitted a nonbinding letter of intent, which it revised July 9 to address the impact of a change in the proposed deal's structure. The other suitor was not invited to conduct due diligence procedures because Farmers & Merchants reiterated its "superior" proposal and Limberlost was focused on retaining confidentiality.

Limberlost's board agreed to proceed with negotiations of a definitive agreement in mid-July. Farmers & Merchants and Limberlost announced their proposed deal on Aug. 20.