Fidelity National Drops Hostile Bid for US Facilities

Fidelity National Financial Inc. ended its 18-month quest to acquire a Costa Mesa insurance firm, saying it now is happy both with the direction that the firm’s new management has taken and with the improved earnings.

Fidelity, which had pursued a hostile $79-million bid for US Facilities Corp., said in a filing with the Securities and Exchange Commission that it does not intend to “pursue or renew” its efforts to acquire the company, buy more shares or seek board representation at this time.

“We’ll just hold the stock and take a wait-and-see approach,” said Fidelity’s president, Frank P. Willey. “I’m very impressed with [new USF President David] Cargile. I think the company’s doing well, and I totally support what he’s doing.”

That’s good news to USF, said Cecelia Wilkinson, a spokeswoman. “The company is clearly pleased there is closure to this,” she said. “Anybody who has followed the progress of the company in the last few months knows that management has been able to accelerate earnings and increase shareholder value.”

Cargile took over last spring from George Kadonada, the founding chairman and chief executive, who had bitterly fought Fidelity’s on-again, off-again bid.

Irvine-based Fidelity, the nation’s fifth-largest title insurer, wanted to diversify its holdings to smooth out the erratic earnings endemic to the real estate industry. It mounted its $15-a-share bid against USF, a medical and property-and-casualty insurer, in April, 1994, as USF’s operations and stock price continued to lag.