Admitting the management of Financial General Bankshares Inc. has stymied their efforts to buy control of the company, a group of Middle Eastern investors filed notice Monday that they will take their fight to Financial General's stockholders.
Lawyers for the Middle Eastern group, which has been trying for two years to buy control of Financial General, notified the Securities and Exchange Commission that they want to put the issue to a vote at Financial General's next shareholders' meeting.
The notice said shareholders will be asked to approve a resolution that, in effect, recommends the company's directors and officers remove all barriers to a takeover offer.
The report to the SEC said the Middle Eastern group's plans to buy control of the bank have been stalled by actions they blamed on Financial General's management.
The notice to the SEC, the first step toward getting the issue on the ballot, was filed by attorneys representing a group of investors who already own about 20 percent of Financial General, a holding company that owns more than a dozen banks.
The investors include Sheikh Kamal Adham, brother-in-law of the former king of Saudi Arabia; Abdulah Darwaish, financial adviser to the royal family of Abu Dhabi; Faisal Saud at Fulajj, a businessman from Kuwait; and Agha Hasan Abedi, an executive of the Arab-owned Bank of Credit and Commerce International of London.
The group says it is prepared to offer up to $25 a share for all the stock of Financial General. The stock has traded recently around $17.50 a share.
The SEC filing says the group has been unable to make a formal offer of $25 because of actions it blames on Financial General's management.
The Federal Reserve Board won't approve the offer until state regulators have approved it, the report to the SEC notes. The Maryland banking commissioner won't approve the offer until asked to do so by the board of directors of Financial General's Maryland bank, American Bank of Maryland. First American's directors are opposed to the takeover and have refused to ask state approval, stalling the deal.
The resolution that the Middle Eastern group wants shareholders to vote on calls on Financial General's management to "take such action as will permit the Federal Reserve Board and other regulatory authorities to consider the offer on its merits."
It also calls on the company to "assure that any direct or indirect subsidiary of the company (also) take such action."
Financial General hasn't had an opportunity to respond formally to the latest move by the Middle Eastern group, and the company's top lawyer, Martin Thaler, couldn't be reached for comment.
In the past Thaler has contended that Financial General cannot force its Maryland bank to take any action. Although Financial General owns a large majority of the stock of First American Bank of Maryland, it doesn't have a majority of the bank's board, which is composed of suburban business executives.