Bank of Vienna has reached an agreement in principle to merge into Dominion National Bank of Northern Virginia, a subsidiary of Roanoke-based Dominion Bankshares Corp.
Dominion, which proposed the merger last month, will pay $35 a share for each of the 114,101 outstanding shares of the $24-million-asset suburban bank.
Bank of Vienna also is the target of a takeover attempt by Bank of Virginia, which is offering to pay stockholders $31 a share in cash. Before launching the tender offer last month, Bank of Virginia already effectively controlled 21.2 percent of Bank of Vienna stock that it agreed to purchase last June. It announced Tuesday that 2,496 more Bank of Vienna shares had been tendered to it as of Sept. 2.
Unlike the Bank of Virginia offer, which is a straight cash offer, the proposed merger between Bank of Vienna and Dominion requires the approval of two-thirds of the shareholders of both banks. Bank regulators have to approve both deals, as do directors of the institutions.
Sources said Bank of Virginia, which extended its offer to buy Bank of Vienna shares from yesterday until Oct. 8, can be expected to boost its offering price.
The directors of Bank of Vienna recommended to shareholders last month that they not offer their stock to Bank of Virginia or, if they already had, to withdraw them. The directors noted in the letter that Dominion had proposed a merger with a higher price. If Bank of Virginia boosts its offer, directors likely will have to reconsider their recommendation.
The Vienna bank is attractive to Dominion and Bank of Virginia because both banks are expanding rapidly and neither has offices in the Vienna area. The Vienna bank has a branch in Sterling, Va.
Bank of Virginia is the state's third-largest bank company, with $3 billion in assets, while Dominion is the fourth, with $2.9 billion.