New Rescuer Appears at Huntington Savings : Unnamed Developer Willing to Trade Land for Control of Ailing Firm’s Stock, Chairman Says
For the third time in less than two years, financially troubled Huntington Savings and Loan is being eyed by a potential rescuer--this time a local real estate developer.
Robert Terry, the S&L;’s chairman, said Monday that a definitive agreement has been reached in which the developer would buy newly issued shares representing a controlling interest in Huntington in exchange for a large parcel of undeveloped land in Orange and Riverside counties.
Terry would not disclose the name of the developer or the value of the deal. He would only describe the potential buyer as a “well-off, matured businessman, who is not a household name.
Capital Infusion
“We are going to get a capital infusion from him (the developer) as well as his expertise and management,” Terry said.
In a July 17 letter to the S&L;’s shareholders, Terry described the deal as one in which “the buyer has agreed to make a tender offer for up to 100% of the 200,000 currently issued shares of the association’s common stock, with payment for the tendered shares to be made on a deferred cash basis.”
If the agreement is approved by regulators, Terry said, the developer would have up to a year to pay for the acquisition. He said he expects the state Department of Savings and Loan to rule on the deal in about three weeks.
Negotiating with potential buyers is not new to Huntington S&L.;
In October, 1983, an Australian conglomerate, Mascot Industries Ltd., offered to buy the two-office S&L; for $6.29 million, and shortly after that deal fell through the S&L; entered into a preliminary agreement to be acquired by Anaheim-based Continental Pacific Enterprises Inc. for at least $6.7 million in cash. That deal, announced in March, 1984, was canceled by Continental several months later.
Terry said he believes there is at least as 50% chance that the latest agreement will bear fruit.
“The third time is the charm,” he said. “This is the first time we got as far as signing a definitive agreement and preparing documents to submit to regulators for approval.”
Huntington opened in July, 1981, with $2 million in capital. Its growth was rapid and it prospered until last June, when losses from unauthorized investments by a former controller devoured all previous gains. Terry said Monday that Huntington expects to report a loss of $41,542 for its fiscal year ending June 30, 1985, compared with the $409,000 loss it reported for fiscal 1984.
The association has a net worth of $1.5 million, which, according to Terry, is above the minimum established for the association by state and federal regulators, who use net worth as one measure of an S&L;’s financial health.
