Financier Offers to Raise $1 Billion in Capital for B of A
Richard C. Blum, a financier who is married to San Francisco Mayor Dianne Feinstein, said Friday that he has offered to raise about $1 billion in new capital for troubled BankAmerica in an effort to keep the institution under local control.
In an interview, Blum said he presented his offer about a month ago after putting together a group of local individuals and institutions “with the deep pockets needed to do the job.”
“It would be a tragedy for the bank to become severely impaired or part of a large financial conglomerate” based outside of San Francisco, Blum said.
Blum said he discussed the offer with a top BankAmerica official whom he declined to identify. Sources said the official was Leland S. Prussia, who took early retirement as chairman of BankAmerica earlier this month when Samuel H. Armacost resigned as president and chief executive. Armacost was replaced by A. W. Clausen, who led the bank during its glory years in the 1970s.
“We haven’t done anything further since Tom Clausen came back in,” Blum said. “We assume our proposal has been passed on to the new management.” Clausen “has to have time to sort out what is best for the bank,” he said, adding that “I and many other people in the community stand ready to play a constructive role, if possible.”
Blum declined to identify the members of his group or to provide specifics on the financing plan, other than to say that it would give BankAmerica’s shareholders an opportunity to buy more stock.
BankAmerica spokesmen were unavailable for comment on the offer, which is similar in some respects to one made recently by investor Stanley Hiller and another made in March by Sanford I. Weill.
San Francisco has lost hundreds of jobs in recent years as a result of the takeovers of such locally based concerns as Natomas, Del Monte, Crown Zellerbach, Itel, Pacific Lumber and Castle & Cooke, so local concern over the plight of BankAmerica is easy to understand.
“My wife had indicated concern some time ago about the condition of B of A and how it would affect the bank’s employees, customers and the overall community,” Blum said. Mayor Feinstein herself was unavailable late Friday.
As reported, Los Angeles-based First Interstate Bancorp is proposing to acquire BankAmerica, an offer that Clausen and BankAmerica’s directors are expected to spurn.
Blum is a 16-year veteran of Sutro & Co. who started his own investment banking firm in 1975. His company puts together partnerships that have taken major equity interests in such companies as URS Corp., Princeville Development and Advanced Systems.
