The board of directors of Financial General Bankshares Inc. issued a carefully worded response yesterday to the latest offer by Middle Eastern investors to buy the bank, and did not reject the offer outright.
The Middle Eastern group, which has been trying for a year and a half to buy control of Financial General, last week raised its offer from $15 a share to $22.50.
Saying it would be "premature for the board of evaluate" the proposal, Financial General issued a letter questioning details of the other, but not commenting directly on it.
The letter was delivered yesterday to Robert Altman, attorney for the Middle Eastern group, and was made public after a Financial General board meeting.
In the letter, FG attorney Martin S. Thaler asked whether the offer would include the company's Class A stock as well as its common shares, and questioned the impact of a takeover on minority shareholders. Financial General owns a controlling interest in more than a dozen banks, but the remaining stock of each of the banks is owned by minority shareholders.
Although that request appeared to invite negotiations between the Middle Eastern group and Financial General management, the letter also raised barriers to an agreement.
It noted that the Middle Eastern group has yet to obtain the approval of federal and state regulators to make a public tender offer for the stock, and it indicated that Financial General would not respond to the offer until regulatory approval is granted. Regulatory approval has been held up primarily because of Financial General's opposition to the takeover.
Both Altman and Thaler confirmed that they had talked about the latest offer, but neither characterized the talks as negotiations.
Altman said he could not comment on the FG letter until he had contacted his clients.