Investors who have been searching for short-term profit possibilities in the Financial General Bankshares takeover fight find some clues in the reports the takeover group has filed with the Securities and Exchange Commission.
One "hot tip" appears to be doused with cold water by the reports, but there fuel for another glimmer of greed.
Preliminary details of the public tender offer that a group of Middle Eastern investors have promised to make for Financial General's shares are buried in the group's three-quarter-inch thick application to form a bank holding company.
A copy of the application was filed in a report to the SEC last week, and by today it should fall out of the SEC's paper-work machinery, ready for public inspection.
The report discloses that the company formed to make the offer, Credit and Commerce American Investment, will try to buy only Financial General's regular common stock. There are about 5.7 million shares and the CCAI group already owns about one million of them.
CCAI "does not currently intend to purchase any other securities of FGB," the report notes.
That will disappoint investors who thought the tender offer might also be made for the half million shares of FGB's Class A common stock. The Class A and regular common shares are identical, save for voting rights; regular has 10 votes, Class A only one.
The Class A stock trades $2 to $3 a share below the other common stock, and there was some speculation that buying Class A shares might allow an investor to make an extra $2 or $3 profit on the tender.
That theory was based on the knowledge that much of the Class A stock is owned by Eugene Casey, the fiercely independent FG board member who is often at odds with company management. Casey is also the largest single owner of the company's common stock.
The contention was, that to get Casey's common, the takeover group would include the Class A stock in the tender offer.
S much for that theory.
The other speculative gambit focuses on the price that will be offered for the common stock, and on that issue, those who want to find encouragement will.
In settling a complaint by the SEC last spring, the CCAI group said it would make a tender offer at $15 per share. That was the top price paid in a series of purchases that were made without revealing that a takeover attempt was underway.
To be fair, the SEC said, every FG shareholder ought to get that much. The promise of a $15 offer quickly brought the trading price of the stock up to that level.
With the stock selling at $15, some hoolders figured the tender offer would have to be made at a higher price to be successful.
The door to that possibility appears to be opened by the latest public filing. The offer, the report says, will be "for a cash price of not less than $15 per Financial General share net to the seller."
The words "not less than" are new and will be seized upon by persons hoping for a higher price.
All but lost in the attention on the attempt to buy control of Financial General has been Financial General's successful purchase of control of one of its subsidiary banks.
FG owned about 46 percent of American Bank of Maryland based in Silver Spring, but has increased that ownership to 57 percent through the merger of American with another FG bank, Chesapeake National Bank, at Towson.
In an exchange of stock, each Chesapeake National share will be traded for 1.5 shares of American. Some of American's minority shareholders think the offer was overly generous, given book values of about $18.50 per share of American and just over $25 for Chesapeake, but shareholders overwhelmingly approved the deal.
Once federal bank regulators approve the merger, Chesapeake's four-office, $40-million operation will become part of American's 18-branch, $200-million system.