Maryland banking regulators yesterday cleared the way for a group of Middle Eastern investors to buy control of Financial General Bankshares Inc., the third-largest banking company in Washington.
The Middle Eastern group now needs only the okay of New York authorities and the Federal Reserve Board to take over Financial General, which operates the First American banks in the District, Maryland and Virginia and others in rural Virginia, Tennessee and New York.
Attorney Robert Altman, who represents the investors from Abu Dhabi, Saudi Arabia and Kuwait, said those two agencies are "proceeding routinely" with applications for the purchase.
Maryland Banking Commissioner W. Holden Gibbs approved acquisition of Financial General by a newly formed United States holding company controlled by the Middle Eastern group via corporations in the Netherlands and Cayman Islands.
At the same time, the state Bank Regulation Board unanimously approved a related application permitting three companies controlled by the Middle Eastern group to become affiliated with Financial General.
Financial General officials announced the Maryland action and also disclosed the Middle Eastern group intends to extend its timetable for making a formal offer to buy Financial General's stock.
Under an agreement negotiated with FG's board of directors, the buyers were to make the offer by June 30, but were granted an option to extend that deadline.
The agreement calls for the buyers to offer $28.50 a share for all of Financial General's outstanding stock and for that price to be increased to reflect any gain in the book value of the stock.
Altman said he could not estimate when the offer will be made.
The buyers of the bank include a price of the royal family of Abu Dhabi, the former director of Saudi Arabia's intelligence agency and the former head of Kuwait Airlines.
It was disclosed yesterday that the buyers have organized a new company called FGB Holding Corp. to buy Financial General. FGB holding is a wholly owned subsidiary of Credit & Commerce American Holding of the Caymen Islands, which is in turn owned by Credit and Commerce American Investment, a Dutch corporation.
The chain of companies is meant to allow the buyers to avoid paying most U.S. taxes on the profits of Financial General.