Business Briefs for Oct. 17

VIRGINIA

Shareholders back merger of bank firms

First Bankshares Inc. in Suffolk and Xenith Corp., a bank in formation in Richmond, said yesterday that their shareholders have approved a merger.

The combined company will operate as a one-bank holding company under the name Xenith Bankshares Inc. The headquarters will be in Richmond.

Suffolk First Bank will operate as a branch of Xenith Bank. T. Gaylon Layfield III, president and CEO of Xenith Corp., will retain his title.

Xenith Corp. was organized in June 2008 in Richmond with the intention of opening as an independent Virginia bank. Because of market changes, the company announced in May that it planned to merge with First Bankshares, a holding company for Suffolk First Bank.

Under the terms of the merger, shareholders of First Bankshares can elect to retain their shares of common stock or receive $9.23 in cash per share, subject to proration if the aggregate cash elections exceed 25 percent of shares outstanding as of the closing.

Shareholders of Xenith Corp. are expected to receive about 0.8972 shares of combined company common stock for each share of Xenith common stock.

The merger is expected to close in November, pending regulatory approvals.

Dividend

• Dominion Resources declared a quarterly dividend of 43.75 cents per share, payable Dec. 20 to shareholders of record Nov. 30.

  THE NATION

  6 cited in hedge-fund insider-trading case

One of America's wealthiest men is among six hedge-fund managers and corporate executives arrested yesterday in a hedge-fund insider-trading case that prosecutors say generated more than $25 million in illegal profits and should be a wake-up call for Wall Street.

Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group, a hedge fund with up to $7 billion in assets under management, was accused of conspiring with others to trade based on insider information about several publicly traded companies, including Google Inc.

U.S. Attorney Preet Bharara said it is the largest hedge-fund case to be prosecuted and marked the first use of court-authorized wiretaps to capture conversations by suspects in an insider-trading case.

Industrial output up for 3 straight months

Output at America's factories, mines and utilities rose in September for the third straight month, but some economists say the manufacturing growth that has helped lead the nascent economic recovery may slow as federal stimulus programs are phased out.

Higher output of motor vehicles and parts spurred much of the September increase, due in part to the government's Cash for Clunkers buying program. But steel and other sectors also posted gains.

The Federal Reserve said industrial production rose 0.7 percent last month. That beat the 0.2 percent increase that Wall Street economists expected, according to a survey by Thomson Reuters.

Martha Stewart says Kmart deal will end

Martha Stewart Living Omnimedia Inc. said it was unable to agree to terms with Sears Holdings Corp.'s Kmart unit that would have allowed their partnership to continue.

Martha Stewart, the New York-based company's founder, told CNBC last month that Kmart let her line of home-goods products deteriorate. The partnership with Kmart ends in January.

Sales from Martha Stewart Everyday products at Kmart totaled 43 percent of the company's merchandising revenue and 10 percent of total revenue in 2008.

Madoff's Long Island beach house is sold

Federal marshals say Bernard Madoff's Long Island beach house has sold for $9.41 million.

The U.S. Marshals Service put the 3,000-square-foot house on the market Sept. 1 to help repay victims of Madoff's massive fraud.

The four-bedroom house is set amid the dunes in Montauk, N.Y., a beach community east of the Hamptons.

The 71-year-old Madoff was sentenced to 150 years.

Madoff's Manhattan penthouse and waterfront mansion in Palm Beach, Fla., remain on the market for $9.9 million and $8.5 million, respectively. -- Staff and Wire Reports