Rival Bidder Has Emerged in FCA Talks : Unidentified Party to Compete With Ford Unit
Another bidder has entered serious negotiations to acquire Financial Corp. of America, a spokesman for the Federal Home Loan Bank Board said Thursday.
The new entry thus becomes a rival to the current leading contender, First Nationwide Bank in San Francisco, a subsidiary of Ford Motor Co. First Nationwide officials have publicly confirmed their interest in buying Irvine-based FCA, whose operating subsidiary is American Savings & Loan, the nation’s biggest S&L.;
Although the bank board declined to identify the new bidder, agency spokesman Karl T. Hoyle said, “I have no doubt it is a serious bid.” As the top regulatory agency for savings and loan firms, the board is orchestrating the attempt to find new capital for American Savings.
Talks Continuing
Executives at FCA and First Nationwide were not available for comment.
The recent drop in interest rates has apparently enhanced the attractiveness of American Savings, which has an $18-billion portfolio of mortgage-backed securities. The market value of these debt securities goes up as interest rates come down.
“That makes (the securities) more attractive and it takes some of the pressure off to do something” about troubled FCA, Hoyle said.
Ford Motor has agreed to inject $1 billion worth of capital into American Savings but discussions have dragged on for months on a variety of other issues, including whether FCA shareholders should be compensated as part of a sale.
The talks with Ford and First Nationwide are continuing, Hoyle said, though he noted that “obviously, when you have more than one bidder, you’re in a better bargaining position.”
Others have previously expressed preliminary interest in FCA, including several banking institutions and private investor groups. But Ford Motor has been viewed as the most logical buyer. Because of heavy losses in recent years, FCA has an estimated $800 million to $1 billion in tax credits that Ford, now the nation’s most profitable auto company, could use.
