Officers of Riggs National Bank, locked in an increasingly bitter battle with financier Joe L. Allbritton for control of the area's largest financial institution, have formed a corporation in Delaware as the first step in establishing a bank holding company that Allbritton opposes.
The price of Riggs stock, meanwhile, jumped $3.50 a share yesterday to a new high of $65.50 in light trading. The bank has urged stockholders to reject Allbritton's $67.50-a-share bid and hinted that a rival offer is being discussed. The low volume indicated that most stockholders had tendered their shares or were waiting for a counter-bid, brokers said.
Allbritton has agreed to buy up to 600,000 shares of Riggs, if that number or less were tendered to his agents by last night, and to buy shares on a pro rata basis if more than that amount is offered to him. But investors also may withdraw those shares before March 3 if an alternative and presumably richer bid is forthcoming.
A preliminary registration statement for the new Riggs National Corp., filed with the Securities and Exchange Commission, also revealed that two well-known directors of Riggs Bank increased their ownership of stock substantially in the past year.
Developer Oliver T. Carr Jr. more than doubled his Riggs holding to 25,300 shares, while Ourisman Chevrolet President Mandell Ourisman more than tripled his to 7,200. Ourisman has been one of the few Riggs directors to speak openly of his reservations about Allbritton's bid to gain control of Riggs, which has assets of more than $3 billion.
"Since he bought The [Washington] Star and then turned around and sold it at a large profit, the first concern would be that the same thing would happen to Riggs, Ourisman said last week.
In another development yesterday, Allbritton disputed the contention of Riggs late Tuesday that his $42.75 million offer for 600,000 shares of Riggs is "inadequate" in terms of price.
"The adequacy of the $67.50 [a share] price which I have offered for Riggs common stock will, in the final analysis, be determined by Riggs stockholders in deciding whether to tender their shares," said the former Washington Star publisher.
Although $67.50 is 14 percent higher than the book value per share as of Dec. 31 -- as Riggs noted in a letter to stockholders that some received yesterday -- Allbritton emphasized in response that his price is 37 percent over the market value of Riggs at the end of 1980 (Riggs traded in a range of $34 to $55 in 1980) and 32 percent higher than the market price on Feb. 6.
That was the last market trading day before he surprised the Washington business community with a bid for Riggs control on Feb. 9.
Although the combined ownership of Riggs stock by directors still falls far short of the amount owned by Allbritton, the Carr and Ourisman purchases lend credence to reports from stockbrokers that some Riggs directors had been seeking to get shares in hands that are friendly to the current management.
According to a preliminary proxy statement for the Riggs annual meeting on April 22, all officers and directors owned 160,430 shares (5.4 percent) on Jan. 22 compared with 450,415 shares (15 percent) for Allbritton after he had acquired a large block from director Jorge Carnicero, chairman of McLean-based Dynalectron Corp., before relations with the board turned sour.
The proxy statement also reveals that Riggs Senior Vice President George Vass Jr. has been nominated to the 25-person board, succeeding Dynalectron Executive Vice President Merlon Richards, who had been a Carnicero selection.
The holding-company proposal by Riggs management is a key ingredient in the fight with Allbritton. Under the current corporate organization of Riggs, stockholders are permitted to vote their shares on a cumulative basis, which permits a large stockholder to concentrate votes for particular directors.
In the case of Allbritton, who would gain 35 percent of the bank's stock if his current offering is successful, he would be able to select at least one third of the 25 directors.
But the holding company plan, detailed in an SEC filing now on the public record, would eliminate cumulative voting. "Therefore, the holders of more than 50 percent of the shares can, if they so choose, elect all the directors of the holding company," the prospectus for Riggs National Corp. notes.
The filing is the first with the SEC by the 145 year-old institution, because bank holding company securities are under that agency's surveillance. Previously Riggs filed reports on its operations only with bank regulators. Stockholders have been asked to approve the holding company at the annual meeting, but Allbritton would have enough votes to veto the plan if he gets 35 percent of the 3 million shares outstanding.
If the holding company plan is passed, on the other hand the Washington bank would become a subsidiary of Riggs National Corp. and shares at the new firm would be distributed to current Riggs bank owners.
Moreover, the prospectus reveals that any persons who vote against the plan are entitled to be paid in cash for their stock at a fair market price. Presumably if Allbritton does not get enough stock to block a holding company he could turn around and force Riggs to buy what shares he owns.