Fremont General Receives Bid to Buy Its Main Business

Fremont General Corp. of Santa Monica received an unsolicited offer Tuesday to buy its Fremont Compensation Insurance Co. subsidiary for about $140 million.

The prospective buyers, an investment partnership called Catalina Acquisitions Inc., did not reveal terms of the deal and were not available for comment. Catalina, however, is affiliated with a group of investors that owns a 7.8% stake in Fremont General.

James McIntyre, president and chief executive of Fremont, said that the company has not had a chance to review the offer but that Fremont Compensation is not for sale.

“We are not really open to offers, but as a public company we are required to look at everything,” McIntyre said.

Fremont’s stock price jumped $1 per share, closing at $18 in over-the-counter trading Tuesday. Analysts said the deal was worth about $17.25 per share, and Fremont shareholders would retain their interests in several other company subsidiaries, including Fremont’s commercial finance operation and its medical malpractice and life insurance businesses.

However, because terms of the sale--including whether the buyers would pay cash or securities for the company--were not available, analysts would not evaluate the deal’s viability.

Fremont Compensation is Fremont General’s primary subsidiary, accounting for 50% of the company’s 1989 revenues and 100% of its profits.