Dissident Baltimore Bancorp shareholders led by Edwin F. Hale Sr. claimed yesterday that they have won the support of the company's biggest shareholder in their proxy fight to seize control from incumbent management.
Mr. Hale said that his aides are scheduled to pick up a proxy from T. Rowe Price Associates Inc. this morning. According to the company's proxy statement, the Baltimore-based mutual fund and money management firm controls 9 percent of the 12.8 million Baltimore Bancorp shares outstanding. In a proxy contest, each share gets one vote.
Henry Hopkins, T. Rowe Price general counsel, confirmed that the firm has decided how to vote in the election, which ends Aug. 29, but he said that announcing the vote would be up to the side that wins Price's support.
Mr. Hale's announcement is not a big surprise because Price also supported Mr. Hale's slate during the Baltimore Bancorp board election that ended May 28.
That vote put six new directors, including Mr. Hale, on the company's 18-member board, which has since been sliced to 17 members by the resignation of former Chairman Harry L. Robinson. But U.S. District Judge J. Frederick Motz ordered a new vote on the issue of expanding the company's board to 28 members, which would let the dissidents gain control of the company, the parent of the Bank of Baltimore.
Judge Motz ordered the new election because the votes of more than 1 million shares were disputed on the one issue. The first election's referee counted those shares as abstentions, allowing the proposal to expand the board to pass by about 970,000 votes. Management contended that those shares should have been counted against expanding the board, but Judge Motz said that there was no way to be sure how the owners of the disputed shares intended to vote.
Both sides in the proxy contest had courted Price's vote. But management has had frosty relations with its biggest shareholder since asking federal banking regulators to investigate Price last year, claiming it had improperly tried to influence Baltimore Bancorp.
"Is it important? Sure. They're all important," said Jerome P. Baroch, executive vice president of Baltimore Bancorp.
"We're out there trying to hustle people with 10 shares."
Mr. Baroch said that management had held two or three recent meetings with Price, hoping both for the vote and to rebuild lines of communication that have been frayed since at least last year. But he said that management can win the proxy contest without Price's support.
The next two biggest institutional holders of the stock are First Maryland Bancorp and Legg Mason Inc. First Maryland is believed to have voted for expanding the board in the first election, while Legg Mason is thought to have voted against it. Neither company has publicly stated how it voted.
Mr. Hale said that he expects to win the votes of most institutional investors, who own less than half of the company's stock. Management is strongest among individuals who own shares.