Lincoln S&L;’s Sale OKd at $288.75 Million

The owner of Lincoln Savings & Loan in Irvine agreed early today to sell the firm to a Southern California investment group in a preferred stock transaction valued at $288.75 million.

The S&L; will be sold to a group headed by Spencer Scott, former chairman and chief executive of Fidelity Federal Savings & Loan in Glendale. The four-member group, based in Glendale, also includes Herman Rappaport, a Los Angeles real estate investor.

Lincoln’s parent company, American Continental Corp. in Phoenix, has hinted for more than a year that it might like to sell the institution and get out of the increasingly regulated savings and loan business.

“It’s a deal that’s excellent for both parties,” Charles H. Keating Jr., chairman of American Continental, said this morning.

Scott could not be reached for comment, and it is not known whether he plans to keep the S&L;’s headquarters in Irvine. Lincoln has 29 branches in Southern California.

In a prepared statement, Scott said, “We plan to operate Lincoln Savings as a traditional savings and loan institution and will concentrate on increasing the volume of single-family and apartment lending.”

Keating’s use of expanded powers for California-chartered savings institutions, particularly his direct investments in real estate projects, upset federal regulators, who view the investments as risky and the S&L; as a development company.

Lincoln was the subject of an unprecedented two-year audit, which ended last winter after Keating agreed to put $10 million of new capital into the S&L; and change more of its $6.5 billion in assets into less risky home loans.

Keating would not say that his problems with regulators were the reason for the sale, but he acknowledged he is glad to get out of the S&L; business.