In a blow to the management of Baltimore Bancorp, the banking company's largest stockholder has voted in favor of the group mounting a hostile takeover of the company.
T. Rowe Price Associates Inc. yesterday voted 873,000 shares in favor of the group of investors led by local transportation executive and Baltimore Blast owner Edwin Hale Sr.
A spokesman for Price declined to comment on its decision. The company holds the shares for its mutual funds or in accounts that it manages for institutional or private investors.
The stock represents less than 9 percent of Baltimore Bancorp's total shares outstanding. But Hale's group declared it a symbolic victory likely to influence the individual investors who hold 65 percent of the company's stock and will determine its future.
"I think the rank and file will take this as a significant sign," said Daniel H. Burch, spokesman for the Hale group.
The battle will be won or lost on Wednesday when stockholders vote at the company's annual shareholders' meeting. Management of the Baltimore company is supporting the re-election of current directors. Hale is supporting a slate of 16 new directors who, he says, intend to fire the company's chairman, Harry L. Robinson.
Five members of Hale's committee met with Price officials on Monday to make their final pitch, Burch said. The company turned over its "proxies," or ballots, to the Hale group yesterday, he said.
"It's a key sign that momentum is moving in our direction," he said.
Baltimore Bancorp, however, still hopes to persuade Price to support current management, said Jerome P. Baroch, executive vice president of the company.
"A proxy can be changed up until the time of the annual meeting," he said.
Even if Price does support the Hale group, it does not spell victory for the challengers, Baroch said.
"It would be disappointing to us, of course. I'm not sure why they they would do it. But I don't know that it will affect the others," Baroch said, adding that management is "pleased" with the results it has seen so far in the voting.
A banking analyst, who spoke on the condition of anonymity, said Price's decision is not surprising given Price's displeasure over Baltimore Bancorp's rejection last year of a bid from rival First Maryland Bancorp. Robinson and the other directors spurned the offer as inadequate, leaving many investors angry about the profit they could have realized from the $17-a-share bid.
The analyst called the Price decision "a major blow against management."
"I think it will certainly influence other shareholders," the analyst said.