The board of directors of the Bank of Vienna voted yesterday to approve a merger with Dominion Bankshares Corp., which has said it will pay $35 a share for the more than 114,000 outstanding shares of the suburban bank.
But the Bank of Virginia also has made a bid to buy the Bank of Vienna for $31 a share in a straight cash-and-carry deal. Sources close to both banks said they expect the big Richmond bank to boost its offer for Bank of Vienna.
A former chairman of Bank of Vienna, Michael Juhasz, and nine other shareholders already have committed themselves to sell their stock to Bank of Virginia. If regulatory authorities authorize the deal, Bank of Virginia would control more than 20 percent of the suburban bank.
The Vienna bank's board last month urged stockholders who had offered their shares to Bank of Virginia to withdraw them in favor of a merger with Dominion. After a month of negotiations, Dominion made a merger proposal last week to Bank of Vienna, which directors of the suburban bank -- with assets of about $25 million -- approved yesterday.
But the laborious merger process needs the approval of the boards of both Dominion and its subsidiary, Dominion Bank of Northern Virginia, as well as approval of two-thirds of the shareholders of both banks.