Some of the biggest banks and finance companies are seen as likely bidders for the auto lender Olympic Financial Ltd., which put itself on the block this week.
Analysts who follow Minneapolis-based Olympic said leading suitors could include banking companies with large consumer finance or auto lending operations, such as Norwest Corp., NationsBank Corp., and BankAmerica Corp.
Other possibilities could be the finance companies GE Capital Corp. or Associates First Capital Corp., or a captive auto lender such as Ford Motor Credit. Joseph A. Jolson of Montgomery Securities said the list is limited because "it has to be someone big enough" to buy Olympic, which has a $3 billion loan servicing portfolio.
"Big commercial banks have got to be at the top of the list," said John Coffey, an analyst at Robinson-Humphrey Co.
Automobile credit is "a business banks are comfortable with," he said. "And it's a way for banks to reclaim a market that they've lost to independents over the years."
KeyCorp and Southern National Corp. are two bank companies that have bought independent auto finance companies within the past two years.
Analysts generally expect Olympic Financial to fetch a price north of the stock's 52-week high of $30 a share, which would translate into a total transaction price of close to $1 billion. Olympic Financial shares closed Tuesday at $26.375, up $2.375.
Mr. Jolson put a "buy" rating on the stock, saying he anticipates "an auction" during the next six weeks.
Olympic Financial spokeswoman Jennifer Weichert said the company had been approached within the last several days by several potential buyers.
"What we received were indications of interest by more than one firm to come in and conduct a due diligence process," said Ms. Weichert, an outside consultant hired by the board. "We do not have an offer on the table at this point."
Olympic Financial said Monday that it had hired Donaldson, Lufkin & Jenrette Inc. to handle investment banking chores. At the same time, the company revealed that Jeffrey C. Mack, the company's founder, chairman, president, and chief executive officer, had resigned "due to philosophical differences" with the board.
Ms. Weichert declined to discuss Mr. Mack's departure except to say that he "had very little interest in selling the business." Mr. Mack could not be reached for comment.
"This was Jeff's company," said Mr. Coffey, the analyst. "I don't think he was willing to selling it at any price."
Analysts said Mr. Mack's small stake in the company - 3% of the shares - put him at a disadvantage in any struggle with assertive directors who control more than 10% of the company.
Olympic Financial's board consists of strong figures such as Warren Kantor, former vice chairman of Advanta Corp.; Richard A. Zona, vice chairman of First Bank System Inc.; and Frederick Zuckerman, former treasurer of Chrysler Corp.
Mr. Kantor, who became an Olympic director in 1994, was appointed chairman of the executive committee Monday. The company said vice chairman Scott Anderson would continue to oversee Olympic Financial's day-to-day operations.
Mr. Mack, a former lending executive at Firstar Bank of Minnesota, founded Olympic Financial in 1990 as a "nonprime" auto lender. The company lends to borrowers who are considered to be either at the low end of the "prime," or bank-quality, category, or at the high end of the subprime market. The latter consists of people with impaired credit records.
Olympic buys installment loan contracts from 6,400 new- and used-car dealers nationwide.
It has grown rapidly, increasing originations at an annual rate of 170% from 1991 to 1995. But the company's stock price never fully recovered from a credit-quality scare last October, when it and other subprime auto lenders began reporting a rise in chargeoffs and delinquencies.
Olympic Financial's net chargeoff ratio has climbed steadily during the past five quarters, to 0.87% from 0.59% in the second quarter of 1995. The delinquency ratio jumped over that span to 1.95% from 0.98%.