The present management of Financial General Bankshares Inc. claimed a "clear cut" victory yesterday in the stockholder referendum on efforts by Sheikh Kamal Adham and other Middle Eastern investors to buy control of the Washington banking company.
Adman's attorney, Robert Altman, however, disputed that evaluation and said settlement talks will continue to try to end the two-and-a-half-year takeover fight.
Financial General announced yesterday that Adham's three nominees for the board of directors were defeated by the management slate in balloting at the company's annual meeting last week in Richmond.
A resolution urging the company to go along with the takeover also failed to win shareholders' approval, the company said.
The vote count was not announced, but Altman said the resolution was supported by 47 percent of the votes cast. Company officials said Adham's candidates for the board got only about 43 percent of the vote, to 57 percent for the incumbents.
The final tally is expected to be disclosed next week, after both sides have had a chance to check and challenge the proxies cast in the election.
As has happened frequently during the fight for control of the $2.3 billion bank holding company, the two sides offered sharply contrasting assessments of what was going on.
Altman called the vote "very gratifying to Mr. Adham and his colleagues" and said it "demonstrates the exceedingly strong support for the concept of having the offer submitted to the shareholders."
Company President J. William Middendorf said he, too, was "extremely pleased and gratified" and issued a statement "to thank our stockholders for their strong support."
The resolution and the unusual competition for seats on the board of directors were the first chance for stockholders to express their views on the dispute that began in late 1977. At that time Adham and others bought about 20 percent of Financial General and said they wanted to make a public offer for the rest of the stock.
The offer has yet to be made because the company so far has so far prevented Adham from getting the approval of state and federal regulators to make the offer. The resolution defeated 53 percent to 47 percent by the stockholders would have urged but not required the company to remove the regulatory roadblocks.
In the meantime, Adham and his colleagues have increased the price they are willing to pay for Financial General's stock from their original bid of $15 a share to $28.50 a share. The stock has traded recently for around $22 a share.
Two weeks ago Middendorf and Chairman of the Board B.F. Saul II said they were willing to accept $28.50, but the deal was never consummated and settlement talks broke down a few days before last Wednesday's voting.
It took a full week just to a preliminary count of the more than 60 million votes. It will take another week to review the count and make it official.
Martin Thaler, general counsel to Financial General, said he considers it "extremely unlikely the outcome will be changed" in the next week.
The largest block of disputed votes involves about 5 percent of the stock which is owned by an employe retirement fund. Those shares were voted against Adham, and Altman already has challenged Middendorf and Saul's claim on the stock.
Even without those shares, management still would be the winner, Thaler said. The banks' employes overwhelmingly oppose the takeover by Adham, he added.
Altman insisted the narrow victory weakened management's position The company failed to show that stockholders are firmly behind it because almost half indicated they want to sell, he said.
Thaler, on the other hand, contended Adham and his group failed to attract much support from small shareholders.
Adham's group owns roughly 20 percent of the stock and had the endorsement of Eugene B. Casey, who controls another 8 percent. Less than 20 percent of the remaining shareholders voted for Adham's resolution, Thaler noted.