U.S. Bancorp to Raise Stake in New Century
U.S. Bancorp, the 14th-largest U.S. bank holding company, said it will increase its stake in New Century Financial Corp. to about 18.8%, after buying 500,000 common shares from one of the mortgage lender’s major investors for $4.95 million. Minneapolis-based U.S. Bancorp said it will pay Foundation Cos., a closely held venture capital fund, $9.90 each for the shares, a 10% discount on New Century’s closing price of $11 on Dec. 22, when it agreed to make the purchase. New Century shares rose 75 cents to close at $13.13 on Nasdaq, and U.S. Bancorp shares fell 25 cents to $35.25 on the New York Stock Exchange. Last month, U.S. Bancorp bought 17% of New Century convertible preferred shares for $20 million to form an alliance with the Irvine-based mortgage lender that will help expand its consumer loan business.