As acquisition rumors drive up his company's stock price, Robert H. Lutz, chief executive of Amresco Inc., is hoping that his company is out of the woods. He notes that surviving units have been bringing in good business.
After hitting a high of more than $35 last year, the stock plummeted in October when the company suffered from hedging losses. Amresco then shut its unit that securitizes home equity loans and fired several hundred employees.
Last week rumors that a major financial institution might buy all or part of Amresco boosted the Dallas company's stock more than 30%. A Prudential Securities analyst tagged the company a "strong buy" because of its growth potential.
"It's been a roller coaster," Mr. Lutz said Friday in an interview. He said the company's surviving units are "all enjoying excellent momentum."
Amresco stock was trading at $12.065 at midafternoon Monday.
Mr. Lutz declined to discuss rumors that a bank or finance company had made an offer for the company, but he did say Amresco is "exploring strategic relationships."
"We would originate and underwrite home equity loans for securitization by another firm," he said. "We wouldn't take any of the balance sheet risk."
Mr. Lutz repeated that the company would entertain any serious offers. "We have a fiduciary responsibility to shareholders," he said. "That's the same response that I would have given you 12 months ago."
In a report issued Jan. 7, Jonathan Adams, a Prudential analyst, raised his price target on Amresco to $15, from $10. "We would not focus on takeover speculation as a reason to buy Amresco, but we do believe that company fundamentals deserve a higher valuation than our previous six-month target price."
The risk associated with earnings potential in Amresco's remaining business units has declined, Mr. Adams said, and investors should concentrate on their improved earnings potential.
First Union, GE Capital Corp., and General Motors Acceptance Corp. have been named as suitors of Amresco. Mr. Lutz declined to identify any company that had shown interest recently, saying "there are more rumors out there than I can begin to list."
He also denied a persistent rumor that Amresco senior executives were asked to report to a meeting very early on Friday morning. "If there was a meeting, I didn't know about it-and I don't foresee any 6:30 a.m. meetings in the future."
