The Middle Eastern investors who are trying to buy control of Financial General Bankshares Inc. raised their bid yesterday for the company from $22.50 to $25 a share.
The new offer was made in a legal agreement with the Securities and Exchange Commission that will give the Middle Eastern group another year to make a tender offer for Financial General's stock.
At the$25-per-share price, the Middle Eastern group is offering more than $140 million for Financial General's 5.6 million shares of stock. Financial General shares have traded around $16 recently on the American Stock Exchange.
The new bid was made after eleventh-hour negotiations between attorneys for the Middle Eastern group and the SEC and was approved as part of a court order handed down by U.S. District Court Judge Oliver T. Gasch.
Today was the deadline that had been set by Gasch last year for the Middle Eastern group to make a tender offer for Financial General. After a hearing yesterday, he agreed to extend the deadline for a year, over objections from lawyers for Financial General, which is fighting the take-over attempt.
In another development in the protracted takeover fight, Washington power broker Clark Clifford has personally entered the legal maneuvering and negotiations.
Clifford's law firm, Clifford & Warnke, has represented the Middle Eastern group all along, but until now Clifford himself has played no visible role in the case, leaving the legal chores to associate Robert Altman. But Clifford appeared with Altman in federal court yesterday to argue against the attempt by Financial General lawyers to block extension of the deadline.
The former Defense secretary and long-time Washington Lawyer also has negotiated directly with Financial General management in an effort to settle the 18-month-old dispute.
Quoting sources in the Arab business world, the authoratative newsletter Mid-East Repor this week said Clifford is close to reaching a compromise agreement to end the takeover fight.
That report was denied by Financial General counsel Martin Thaler, who confirmed that Clifford has talked with top management of the Washington Bank holding company. "I would not characterize those talks as negotiateions," Thaler said.
Clifford reportedly has met not only with representatives of Financial General, but also with FG Chairman B. F. Saul Jr. and with board member Eugene B. Casey, the two largest individual shareholders except for Clifford's clients.
The Middle Eastern group owns about 20 percent of the stock of Financial General, the holding company that controls 13 banks in the District of Columbia. Virginia, Maryland, Tennessee and New York.
The group purchased its shares in late 1977, and got in trouble with the SEC for failing to disclose publicly that it was seeking control of the company.
To settle and SEC complaint, the group agreed to make a public tender offer of at least $15 a share for all the remaining stock of FG. Judge Gasch set the Aug. 1 deadlline for making the offer.
No tender offer was made, however, because the group has been unable to get the necessary approval of state and federal banking regulators. Financial General and its independently operated banks have blocked the regulatory action with a series of legal maneuvers.
In a hearing yesterday, Clifford and Altman aruged that Financial General's management should not be allowed to prevent the company's shareholders from having an opportunity to sell their stock at a substantial profit. The price the Middle Eastern group is willing to offer is more than twice what the stock was selling for when the takeover fight began, Altman said.
The Middle Eastern investors seeking control of the $2.2 billion Washington bankholding company include Kamal Adham, former chief of security of Saudi Arabia and a relative of the Saudi royal family. Faisal Saud al-Fulaij, former chairman of Kuwait Airlines; and a prince in the royal family of Abu Dhabi.
The group plans to make its tender offer through Credit and Commerce American Holdings, a Dutch Antilles corporation affiliated with Bank of Credit and Commerce International, a London financial institution that has been been a conduit for Arab oil investments.