UnionFed Receives OK for Offering to Avoid Takeover

UnionFed Financial Corp., parent company of Union Federal Bank, said Wednesday that it has received federal approval to raise more than $37.5 million to stave off a government takeover.

UnionFed said the Securities and Exchange Commission approved its plan to solicit funds from existing stockholders, its directors and officers and wealthy investors. Company officials would not disclose how the sale is proceeding, other than to say another announcement could come as soon as Friday.

The Brea-based company needs to net at least $37.5 million in the offering to meet new capital requirements and avoid a takeover by the Office of Thrift Supervision. UnionFed lost $32.2 million in the fiscal year ended June 30.

The rights to buy new shares are being offered at $1.75 a share. UnionFed stock closed Wednesday at $1.87, down 25 cents, in trading on the New York Stock Exchange.

UnionFed also announced that the Office of Thrift Supervision has approved its plan to sell its branches in Lake Forest, Agoura, Beverly Hills and Rosemead, with about $180 million in deposits, to California Federal Bank. UnionFed has $1.2 billion in assets and 18 branches in Southern California.