No Deal, Letter From Giant Group Tells Irvine-Based Fidelity National

Giant Group Ltd. escalated its war of words Thursday against Fidelity National Financial Inc., issuing a fiery letter that flatly rejects the Irvine title company’s unsolicited takeover bid.

Giant Group’s decision came a week after Fidelity National offered $49 million in stock for outstanding shares of the Beverly Hills company, which owns a 47% stake in the Rally’s hamburger chain.

Fidelity National Chairman William P. Foley II had threatened to initiate a proxy fight if his company’s offer was rebuffed. Previously, the two companies traded lawsuits after Fidelity acquired a 14.75% stake in Giant Group.

In Giant Group’s rejection letter, board member Terry Christensen contended that Foley has a hidden goal to “bankrupt Rally’s, liquidate Giant and use the resulting cash to acquire assets for Fidelity.”

“The board is adamantly opposed to such a plan for Giant,” Christensen wrote. “We believe that Giant and its predecessor company which dates back to 1893 should not be destroyed.”

Fidelity National Vice President Andrew Puzder said his company wasn’t fazed by Giant Group’s response, and it will determine its next step during the next few days.

“You’ll notice that there was nothing in the letter where they say the price we’re offering is unfair,” Puzder said. “The letter is consistent with the existing board’s practice of further entrenching itself.”

Fidelity executives have said that they would consider going directly to Giant Group shareholders or staging a proxy fight if their offer isn’t accepted. Puzder in the past described Giant Group as an “undervalued asset,” given its $50 million in cash, tax benefits and receivables.

Fidelity’s stock rose 50 cents a share Thursday to close at $17, while Giant Group’s shares were unchanged at $9. Both stocks are traded on the New York Stock Exchange.