UPDATE 1-Frontier Financial denies acquisition rumors

Tue Apr 27, 2010 4:02pm EDT

* Rumors suggested a proposed bid from Infinite Freedom

* Shares fall 17 pct

April 27 (Reuters) - Frontier Financial Corp FTBK.O denied rumors of a proposed bid by an investment group, sending its shares down 17 percent.

"To the company's knowledge there is no basis for the rumor," its Chief Executive Patrick Fahey said in a statement.

On Monday, Frontier Financial's shares nearly doubled, with more than 23 million shares changing hands, after rumors of Infinite Freedom Foundation being in the process of bidding for the company came on the Internet.

Last month, the Everett, Washington-based company revised its fourth-quarter results to reflect higher losses and said its weak capital position raises substantial doubt about its ability to continue as a going concern. [ID:nSGE62G0IF]

Frontier shares closed down 93 cents at $4.95 on Nasdaq. They touched a low of $4.77 earlier session. More than 11 million shares changed hands. (Reporting by Archana Shankar in Bangalore; Editing by Gopakumar Warrier)