Irvine’s Fidelity National Ups Stake in Giant Group

Fidelity National Financial Inc., appearing more like a hostile bidder, has again increased its stake in Hollywood producer Bert Sugarman’s Giant Group Ltd., according to documents filed Monday with federal regulators.

Fidelity, one of the nation’s largest title insurance carriers, said in a Securities and Exchange Commission filing that it and its chairman have bought enough Giant Group stock to control 10.5% of the Beverly Hills company.

But Fidelity’s chairman, William P. Foley II, who owns 0.2% of Giant personally, said his company is not making a hostile bid for Giant “at this point.”

“We are an investor who should not be deemed to be passive,” he said Monday. Fidelity plans to buy more Giant Group stock to increase its stake to nearly 15%.

Giant has filed a lawsuit against the Irvine insurer and Giant has approved an anti-takeover strategy that would make it prohibitively expensive to purchase a company once a buyer obtains a 15% interest.

The lawsuit against Fidelity, Foley and two brokers alleges they were using inside information to try to take control of the company and its investment in Rally’s hamburgers Inc., a Louisville, Ky., operator of 460 fast-food restaurants in 25 states. They denied the accusations.

Giant controls 47% of Rally’s. Foley is chairman of CKE Restaurants Inc., the Anaheim company that operates 668 Carl’s Jr. fast-food eateries. Fidelity, Foley and an investor group that Foley heads control 24.8% of CKE.

Fidelity and Foley, in their first SEC filing related to Giant, said they spent nearly $3 million to buy 8.6% of Giant’s stock. In a filing just before Christmas, their interest had grown to 8.9%. So far, Fidelity and Foley have paid a total of $3.9 million for Giant stock, according to the most recent filing.