DATE: Tuesday, November 18, 1997            TAG: 9711180254

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER
DATELINE: NORFOLK                           LENGTH:   53 lines

2 CENIT INVESTORS SEEKING SALE VOTE PROPOSAL TO BE INCLUDED IN SPRING PROXY STATEMENT

CENIT Bancorp Inc., whose board was challenged earlier this year to consider selling the company, said two investors are seeking a shareholder vote next spring on an immediate sale of CENIT.

Mid-Atlantic Investors of Columbia, S.C., and Jerry Zucker, a Mid-Atlantic partner, have asked that their proposal for finding an acquirer be included in the proxy statement CENIT distributes to shareholders before its 1998 annual meeting, CENIT said.

In a statement, the Norfolk-based parent of CENIT Bank and Princess Anne Bank expressed confidence that investors would reject the Mid-Atlantic proposal.

At CENIT's annual meeting last April, Mid-Atlantic came close to winning shareholder approval for a resolution to hire an investment banker and weigh selling the company. The measure lost by less than 1 percent of the 1.33 million shares voted at the meeting.

In a bitter and expensive contest, CENIT and Mid-Atlantic hired firms that specialize at finding individual stockholders and lining up their support. Because of the narrow margin of the votes, CENIT's 1997 annual meeting was carried over from April 23 until May 27 to enable each side to examine the votes.

In addition to its measure for a possible sale of CENIT, Mid-Atlantic nominated three candidates for election to CENIT's board of directors. All three were defeated, and four existing directors were returned to the 11-member board.

In July, CENIT reported that it spent slightly more than $400,000 on the proxy battle and legal fees related to the battle with Mid-Atlantic.

Since year end 1996, the price of CENIT's stock has climbed almost 60 percent. On Monday, its shares closed at $66.25, down 25 cents for the day.

H. Jerry Shearer, Mid-Atlantic's managing partner, attributed the sharp rise in price partly to Mid-Atlantic's efforts to have CENIT merge with a larger banking company. Interest in the stock also has been fueled by the rapid consolidation of banks in Virginia, Shearer acknowledged.

However, the longer CENIT's board resists being acquired, the fewer potential buyers are available, Shearer contended. CENIT's management has not ruled out being acquired but has argued that it has its own program for enhancing shareholder value.

CENIT, whose assets total slightly more than $700 million, has $50.1 million of shareholders' equity. It has 1.66 million shares outstanding.

Shearer said Mid-Atlantic has no plans to nominate its own slate of candidates for the CENIT board at the company's annual meeting next spring.

Mid-Atlantic, which accumulated a major stake in CENIT in early 1995, holds about 9.7 percent of the CENIT's shares. The partnership specializes in buying shares of community banks and thrifts in the Southeast that it considers candidates for acquisition.

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