SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 1, 2001
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Essex Bancorp, Inc.
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Exact name of registrant as specified in its charter
Delaware 1-10506 54-1721085
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Interstate Corporate Center
Building 9, Suite 200
Norfolk, Virginia 23502
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Address of principal executive offices Zip Code
Registrant's telephone number, including area code (757) 893-1300
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(Former name or former address, if changed since last report.)
Item 5. Other Events
Essex Bancorp, Inc. ("Registrant") issued a press release on February
1, 2001 announcing that, among other things, at a meeting on February 1, 2001,
the Registrant's Board of Directors (the "Board") unanimously decided to
consider the viability of a going-private transaction, which would be subject to
the recommendation and approval of a Special Committee. If such a transaction
goes forward, it will also be subject to shareholder approval. The impetus for
such a transaction is the Board's belief that neither the Registrant nor its
common shareholders derives any material economic benefit from the continued
registration of its common shares and that the monetary expense to the
Registrant and the management time involved with the Registrant's continued
status as a public company significantly outweigh any benefit that may be
received by the Registrant or its common shareholders. In a going-private
transaction, the Registrant would merge with a subsidiary, and the Registrant's
common shareholders would receive a cash payment for their shares. The Board
believes that such a going-private transaction may be the best way to provide
liquidity and a return to the Registrant's common shareholders. As the
Registrant has previously disclosed, the accumulating dividends on the
Registrant's classes of preferred stock are such that the Registrant's book
value per common share is likely to remain negative, and even increase, for the
foreseeable future. Based on a preliminary analysis, which takes into
consideration the current and prospective negative book value per common share,
the unlikely prospect for common stock dividends, the number of common shares
currently outstanding and other factors, the Board believes that if the
going-private transaction takes place, the cash price to be paid to shareholders
would be approximately $1.45 per share.
Accordingly, the Board has formed a Special Committee and has
authorized it to, among other things, (i) retain a financial adviser to render
an opinion as to the fairness of the cash consideration to be received by common
shareholders from a financial point of view, (ii) retain securities counsel to
ensure compliance with securities regulations and special counsel to assist in
the decision-making process, (iii) pursue requisite regulatory approvals for
such a transaction and (iv) evaluate alternatives for financing the payment to
shareholders and the related transaction fees. The results of these activities
will ultimately be the basis for a recommendation by the Special Committee to
the Board with regard to the structure, fairness and advisability of the
going-private transaction. Although there can be no assurances that the
going-private transaction will take place, the Board currently anticipates that
it may submit a proposal to the Registrant's shareholders for their approval at
the Registrant's annual meeting to be held on June 21, 2001. This annual meeting
date has been rescheduled from the previously-announced date.
The Registrant's press release is not an offer to acquire any shares of
common stock. If the Registrant proceeds with a going-private transaction, the
shareholders will receive a proxy statement describing the transaction
(including any conditions to the closing of the transaction). Any decision
regarding such a transaction should be based on that disclosure.
The above discussion may contain forward-looking statements that
involve assumptions and potential risks and uncertainties. The Registrant's
future results could differ materially from those discussed herein. Readers
should not place undue reliance on any forward-looking statements, which are
applicable only as of the date hereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Essex Bancorp, Inc.
February 6, 2001 By: /s/ Gene D. Ross
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(Date) Gene D. Ross
Chairman, President and
Chief Executive Officer
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