Even critics of Sun Savings & Loan’s complicated proposed capital infusion from developer Victor Fargo admitted they were pleased that Sun’s relocation into Fargo’s new La Jolla office complex would be an image-boost for the financially troubled S&L.;
The visibility alone would be a positive step, observers believed.
But now comes word that Fargo’s building will not be named for Sun, but for Merrill Lynch Pierce Fenner & Smith, which has signed a $5.4-million, 10-year lease for 13,370 square feet of space. That’s about half the space Sun will occupy.
Sun officials appear to have taken the move in stride. Although the facility will be called the Merrill Lynch Building, Sun’s signage will be “no less visible and prominent” than Merrill Lynch’s, according to John Grosvenor, Sun’s executive vice president.
Moreover, Sun president and chief executive John McEwan, noting that Sun will share in 25% of the profits from the building’s leases, said that naming the building after Merrill Lynch “doesn’t bother me at all--they’re a good tenant.”
In addition, sources familiar with the leasing arrangement claim that Fargo’s lenders have insisted that Sun provide some time of “assurances” or security to cover two years worth of rent. Most likely form: a letter of credit from either Fargo or Sun.
Sources said that Fargo’s potential lenders want rent security, because Sun’s net worth will remain below the regulatory minimum until it receives Fargo’s $2.5-million cash infusion.
Money to Give Away
The folks taking money last week from the slovenly looking man standing across the street from Horton Plaza probably believed his story that he was passing out greenbacks belonging to his trillionaire oil-baron uncle from Bismarck, N.D.
He dished out individual dollar bills from a huge wad to gracious and unquestioning takers. And the crowd grew larger and a bit greedy when he pulled out a stack of 10s and 20s.
“I’ll pass out a couple of thousand dollars today,” the man said.
One police officer passed by and, after surveying the scene, shrugged his shoulders and moved on, apparently unable to find a law against giving away money in public.
Curious, this reporter called the man’s uncle in Bismarck. Rather than a trillionaire oil tycoon, the uncle was a 74-year-old retired working stiff. And he was surprised that his nephew’s actions.
“I haven’t seen him in 20 years,” the uncle said. “Heck, I didn’t know he was out of the institution.”
We’ll never know how good a marriage would have developed from the proposed merger between San Diego-based Tetrahedron, a supplier of presses to the aerospace industry, and New York-based Haganah Ltd., a military research and development firm.
Last week, the merger was tersely called off.
Tetrahedron issued a one-line statement, saying only that it had “terminated acquisition discussions with Haganah.” And, two days later, Haganah issued a two-sentence release to confirm that merger talks had soured.
Haganah also said that it had received an offer similar to Tetrahedron’s from another company, but that it would be “premature to comment” on it.
Curiously, Tetrahedron’s two-step offer was to buy most of the shares owned by Haganah insiders for $2 million in 10-year debentures, or about 50 cents per share, and the rest of the shares, estimated at about more than 3.5 million, for convertible preferred stock with a face value of $2 per share.
Haganah stock is trading at about 75 cents per share, so the public shareholders would have received a premium; but the insiders, with most of their stock held in escrow by the Pennsylvania Securities Commission, would have sold their shares for less than market value.
“They asked me to come to New York and, when I got there, the deal had not even a semblance for what I proposed,” according to Alfred Blumberg, Tetrahedron’s chairman, president and chief executive. (The company reported $1.3 million in sales and $60,000 in earnings for the year ended April 30.)
Blumberg said he was among the curious when Haganah announced it had received a similar offer after the Tetrahedron deal was killed.
Haganah legal counsel Ted Berman confirmed Blumberg’s offer but declined to discuss specifics of the proposal.