Magazine article American Banker

As Calif. Thrifts Surge, Feared Investor Cuts Stake in One

Magazine article American Banker

As Calif. Thrifts Surge, Feared Investor Cuts Stake in One

Article excerpt

Just when California thrifts begin catching the eye of investors, activist shareholder Michael Price appears to be turning the other way.

The prominent head of Heine Securities Corp. sold nearly half his 8.6% stake in Bay View Capital Corp. during the past month. The sale of 257,200 shares in the $3.4 billion-asset San Mateo thrift, at prices ranging from $35.56 to $39 a share, gained Mr. Price a total of $9.6 million.

The move was revealed in a Securities and Exchange Commission filing this week, and it came as analysts are almost unanimously bullish on West Coast thrifts. These companies are said to be on the verge of a major consolidation wave. Bay View itself has been considered a prime acquisition candidate.

Last week, Rodman & Renshaw Inc., San Francisco, said that Bay View's share price could climb another 35% within 18 months - to as much as $50. In late trading Thursday, the stock was at $38.25.

So what gives?

Mr. Price, who gained attention last year for pressuring Chase Manhattan Corp. and Michigan National Corp. into deals, could not be reached for comment. But Raymond Garea, a vice president at Heine, cautioned the market not to read too much into its Bay View move.

"It's just a question of valuation," Mr. Garea said. "The stock has had a really big move, and management has done some things that made sense."

Indeed, Bay View's stock price has surged 36% this year, approaching what some analysts have estimated as its takeover price. Thomas O'Donnell of Smith Barney, for example, has predicted a near-term takeover price of $38 to $40 a share and a one-year target of $40 to $42 for Bay View.

Observers said that Mr. Garea's explanation of the stock sale is entirely plausible.

"They bought it low and sold it high; it could be as simple as that," said Thomas Theurkauf of Keefe, Bruyette & Woods Inc. …

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