Shareholders who had been trying to force Baltimore Bancorp to negotiate a possible sale to First Maryland Bancorp dropped their four lawsuits yesterday, citing the fact that the $17-a-share offer to buy the banking company had been withdrawn.
The suits, filed just days after Baltimore Bancorp gave a icy reception to the buyout offer, had asked the court to set aside the banking company's anti-takeover provisions and force its board to discuss the unsolicited bid from First Maryland, the state's second-largest banking company and parent of First National Bank of Maryland.
Baltimore Bancorp, which owns the Bank of Baltimore, received the original all-cash offer on April 27, and after rejecting it twice, finally ignored it altogether as the bid sat languishing on the table for six months. First Maryland, citing "changes that have arisen in the marketplace," withdrew its offer three weeks ago as "no longer appropriate," the company said.
"Essentially, since there is no takeover offer outstanding, there is nothing for us to argue about in that regard," said John B. Isbister, an attorney at Tydings & Rosenberg in Baltimore and local counsel for the four consolidated lawsuits. "This was a voluntary dismissal in light of the circumstances."
The shareholders who filed suit have fewer than 1,000 shares of Baltimore Bancorp stock.
A separate lawsuit alleging that Baltimore Bancorp, its directors and its investment adviser, Alex. Brown Inc., violated federal securities law in connection with the takeover rejection was not affected by yesterday's action.
That suit, brought Nov. 8, alleged that the company misrepresented its true financial condition which, in turn, "artificially inflated" the stock price. The lawsuit was filed on behalf of all shareholders who bought stock between May 16, the date of Baltimore Bancorp's initial rejection, and Nov. 1, the day the offer was withdrawn.
Baltimore Bancorp, which traded slightly above $10 a share before the offer and $15 a share immediately after, closed yesterday at $4.875 a share, up 50 cents. A spokesman for the company, senior vice president Gerald B. Kracke Sr., declined to elaborate on the company's announcement yesterday.