George Olmsted, head of International Bank, moved yesterday to secure control of his company by exercising an option to buy $57.3 million worth of its stock from a Dutch insurance firm.
The purchase would give Olmsted, who currently controls almost 40 percent of the bank's stockholder votes, another 22.3 percent, for a total of 62.3 percent.
"It will be the first time that Gen. Olmsted and his group will have majority control," said Guy Martin, president of International Bank.
International Bank, which calls itself a "merchant bank," has a wide range of investments in industrial, insurance and shipping companies. Its headquarters is at 1701 Pennsylvania Ave NW., in a building named for Olmsted, an 84-year-old retired Army general who served in World War II and the Korean conflict.
Martin said Olmsted will file a report Monday with the Securities and Exchange Commission, telling the SEC how he will finance the $57.3 million to pay for the stock. Two International Bank subsidiaries recently decided to sell $41.9 million of stock in Foster Wheeler Corp.
Martin said Olmsted was determined to keep International Bank a D.C. corporation. There have been suggestions that International Bank might be a takeover candidate.
Olmsted will purchase the stock from AEGON N.V. of the Netherlands, reportedly the second-largest Dutch insurance company, with assets worth $11 billion. AEGON acquired its stock in International Bank through its purchase of a controlling interest in Life Investors, an Iowa insurance company.
AEGON has agreed to sell 797,774 shares of regular common stock and 4.2 million shares of class A stock. The total shares outstanding are 4.5 million in common stock worth 10 votes each and 8.5 million in class A shares worth one vote.
The purchase price of the stock was set in November at $11.50 a share. The common stock closed yesterday at $13 a share; the class A stock closed at $13.25 a share. The stock represents AEGON's entire holding in International Bank.
International Bank, which does business in 50 states and 38 foreign countries, has had rough financial going since 1981 and reported a loss of $8.8 million for 1984.
It blamed recent losses on its packaging machinery operation and property/casualty insurance division, which reported an underwriting loss of $40.8 million, almost double the 1983 underwriting loss of $20.7 million. However, the bank recently reported a turnaround in the property/casualty division, saying it showed a loss of $514,000 during the first quarter of 1985, compared with a $7 million shortfall for the first quarter of 1984.
Net income for International Bank during the first quarter of 1985 was $470,000, compared with a $5.6 million loss in the 1984 first quarter.