A South Carolina thrift raider has expanded its reach into Virginia by acquiring a 9.9% stake in a Norfolk thrift.
The Columbia, S.C.-based general partnership, called Mid-Atlantic Investors, disclosed this week that it has purchased $3.3 million of stock in Cenit Bancorp.
The purchase likely makes the partnership the largest shareholder of the thrift.
The stock price surged this week after the identity of the investors became known on Monday. It closed at $33.75 on Thursday, representing an 18% increase from the stock's price last Friday. In the two days after the investors disclosed their actions in a Securities and Exchange Commission filing, 144,300 shares of the stock were traded, almost twice the stock's trading volume for all of January.
"Given their (Mid-Atlantic's) high profile, I would guess there are quite a few people that look to coattail on what they do," said Merrill H. Ross, equity analyst at Wheat First Butcher Singer in Richmond.
Speculation also increased on a forthcoming merger involving Cenit, fueled by Mid-Atlantic's reputation for forging such deals in the past. Mid-Atlantic made headlines last fall by squelching a deal between two South Carolina thrifts and subsequently bringing in First Union Corp. of Charlotte as the acquirer.
"They (Mid-Atlantic) have about an 18-month fuse," said Ms. Ross. "But that's only guessing. There are cases where they haven't agitated for a merger."
Mid-Atlantic consists of Jerry Zucker, a manufacturing executive in Charleston, and Jerry Shearer, who runs the day-to-day operations.
"Cenit fit our profile of undervalued situations," said Mr. Shearer. "We had been looking at it for sometime and thought now was a good time to make an investment with the merger market heating up in that area."
Cenit officials would not comment on Mid-Atlantic becoming a major shareholder. Cenit's next board meeting is scheduled for April 26, at which time the investors' intentions should become known, Ms. Ross said.
