Giant Group Withdraws Plan to Increase Its Stake in Rally’s

Beverly Hills-based Giant Group Ltd. said Monday that it has withdrawn its plan to increase its 47% stake in Rally’s Hamburgers Inc., the Louisville-based fast-food company.

Giant Group, the target of an uninvited takeover bid by Irvine-based title insurer Fidelity National Financial Inc., earlier said it planned to increase its holdings to 79.9% by swapping Giant Group preferred stock for Rally’s common shares.

Giant Group spokesman Terry Christensen said the swap was abandoned because Rally’s managers believe the chain is “best served by having a wider dispersion of its stock. They think that it will give them greater flexibility as it continues its recovery.”

Fidelity National officials applauded the decision. “It was the right move for them to make,” said a spokesman for Fidelity National, which earlier labeled the stock swap as a bid by Giant Group to deflect the unwanted takeover.

Fidelity National’s takeover attempt is on hold pending court action.