First United in Oaklan, Md., is buying out an activist investor to end a longstanding dispute.
The $1.7 billion-asset company disclosed in a regulatory filing Monday that it had agreed to buy about 361,000 shares of its stock from Driver Opportunity Partners for $6.5 million. Driver disclosed in a seperate filing that it no longer owns and First United stock.
First United and Driver also agreed to a cooperative agreement, under terms of which the banking company agreed to pay the investor $3.3 million to settle outstanding litigation.
Driver agreed to withdraw its notice of intent to nominate Abbott Cooper, a managing member, to stand for election to First United’s board at the company's next annual meeting. The investor also agreed to withdraw any other shareholder proposals, stop soliciting proxies and refrain from buying First United stock.
First United and Driver agreed to a 10-year standstill period during which each side will avoid disparaging the other. They also agreed to a general release of claims against each other.
First United agreed to voluntarily dismiss a declarative relief action it filed against Driver that is pending in the U.S. District Court for the District of Maryland.
First United said it will record a $2.5 million charge in the first quarter. The company said one of its insurers intends to contribute $404,000 toward the settlement payment and other legal expenses incurred, and that it plans to “pursue additional amounts” from other carriers.
Driver has spent recent years pushing First United to sell itself. First United and Driver have been involved in litigation in recent months over claims each made about their behavior leading up to
