Hammond, Irvine Suitor Agree on Standstill
The Hammond Co., trying since May to shake the advances of an unwanted suitor, on Friday reached another temporary standstill agreement with a potential buyer.
Hammond said Fidelity National Financial Inc. of Irvine has agreed not to purchase any more of Hammond’s stock for six months.
In return, Hammond will provide Fidelity with information about its business and finances.
The information will enable Fidelity National, a real estate title insurance company, to decide whether to make a formal offer for Hammond. Fidelity owns 23.6% of Hammond’s common stock.
Hammond is one of a handful of publicly traded mortgage brokers in the nation. Fidelity bought a 16.3% stake in the company in May and said then that it was doing so for investment purposes only.
But in late September, after increasing its holdings to 23.6%, Fidelity filed a statement with the Securities and Exchange Commission in which the company said it was considering launching a tender offer for control of Hammond.
When Fidelity first started buying Hammond’s stock, the shares were trading at or below the company’s June 30 book value of $4.49 and Fidelity officials said they were only interested in acquiring stock if the price stayed at that level.
On Oct. 2, when Fidelity’s SEC filing was made public, Hammond’s stock price jumped $1.50 a share to close the day at $5.88.
Since then, the stock has inched steadily upward, closing Friday at $7.50 a share, an increase of 12 1/2 cents for the day.
Fidelity has entered four standstill agreements with Hammond since mid-September, promising each time not to buy more of the company’s shares for a specified period.
