Riggs National Bank yesterday announced plans to raise about $60 million from the sale of stock, a move that could help Riggs acquire banks or other businesses outside the District.
Although Riggs itself has often been mentioned as a takeover candidate, the stock offering appeared to signal the bank's lack of interest in being bought out, in favor of making its own acquisitions.
Riggs said in documents filed with the Securities and Exchange Commission that the proceeds of the stock sale would be used for general corporate purposes and "possibly, acquisitions of banks or nonbanking companies." But, the bank added, "While Riggs continually reviews acquisition possibilities, it currently has no understandings, arrangements or agreements with any other party."
Chairman Joe L. Allbritton stated the bank's intentions in a message to stockholders included in the company's 1985 annual report made public yesterday. Allbritton said the bank is "actively and aggressively exploring possibilities that will allow us to expand our banking business to desirable areas beyond the District within our contiguous market region."
Riggs stock closed yesterday at $64.50, down $1.50.
Lewis Sosnowik, bank stock trader at the Lang Division of North American Investment Corp., in Washington, said he thought the price dropped because some investors were disappointed by news of the stock sale.
"People were expecting Riggs to sell out," he said. "Riggs could easily fetch $75 a share."
Under the offering plan, Riggs will issue 1.750 million new shares at a price to be fixed in several weeks. The price will mirror the market value of Riggs shares at the time. The offering allows for the underwriters, Morgan Stanley & Co., and Alex. Brown & Sons, to sell an additional 262,500 shares, for a possible total of 2.012 million shares.
Before the stock sale takes place, however, Riggs will split its shares 2 for 1, thereby tending to initially cut the current price in half. At yesterday's closing price, the stock would sell for about $32.25, for a total of $64.9 million, before underwriters' commissions. The stock split will be effective March 31, for stockholders of record March 24.
A Riggs spokesman said the sale of additional shares of stock will reduce the percentage of stock Allbritton controls. Allbritton now owns 41.2 percent of the stock. That will decline to 35.3 percent after the offering.
A Riggs spokesman said, "The drop in percentage of ownership will not materially affect his [Allbritton's] control of the bank."
A 25 percent ownership of bank stock is generally considered a controlling interest by regulators.
The split will double the shares outstanding from 5.984 million to 11.968 million, increasing the "float" or the amount available for trading.
Riggs also boosted its quarterly dividend by 10 percent to 55 cents from 50 cents a share, giving the bank an annual rate of $2.20.
The price of Riggs shares moved up strongly during 1985, rising 86.5 percent, to close at about $62 a share. The upward move was accompanied by continuing speculation about takeovers.
Riggs, which had assets of $5.4 billion as of Dec. 31, ended 1985 with earnings of $5.18 a share, compared with $4.49 a share in 1984. Net income grew to $30.9 million from $26.8 million.