Dallas Investors Raise Their Stake in First Executive
A group of Dallas investors reported Wednesday that it raised its stake in the insurance holding company First Executive Corp. to 9.2% but said nothing new about the possibility that it may seek to take the company private.
The group, headed by Rosewood Financial Partners, said its representatives have met with Fred Carr, president and chief executive of the Los Angeles company, “to discuss strategies for enhancing shareholder value.”
However, it added, “no specific proposals were presented or discussed.” The filing with the Securities and Exchange Commission said it may seek additional meetings to discuss various alternatives. As previously set out, these include suggesting a review of alternative capital structures, taking the company private or pursuing a “business combination.”
Management Favors Dividend
Separately, First Executive announced Wednesday that Carr intends to recommend a 5% stock dividend in mid-November at a special board meeting.
The company at the same time reported record third-quarter net income of $52.6 million, compared to $46.9 million a year earlier. The latest earnings include $2.6 million in realized gains on investments, compared to $2.9 million last year.
Vice President Allan L. Chapman said management was recommending the stock dividend as a distribution to longtime stockholders because First Executive does not pay cash dividends. The firm declared a 5% stock dividend earlier this year.
He said management has met several times with Rosewood representatives.
The Dallas investors raised their stake in September to 7.5% from the 6.2% they initially reported Aug. 26. The figures were in 13D filings with the SEC.
Rosewood, which owns 8.1% of the group’s 9.2% stake, is a private investment concern that manages oil heiress Caroline Rose Hunt’s nearly $1-billion fortune. It said it has invested $77.3 million, including payments for brokerage commissions, for the 6.2 million First Executive shares it has bought in the over-the-counter market.
The Dallas group would need approval of state insurance regulators to acquire more than 10% of First Executive.
