Bay View Capital Corp. of San Mateo, Calif., has made a $175 million bid for ailing Bank Plus Corp. of Los Angeles, according to sources close to the situation.
The $9-per-share offer for $3.5 billion-asset Bank Plus does not include its troubled subprime credit card portfolio, sources said.
Bay View chief financial officer David Heaberlin would not comment directly but said his $5.7 billion-asset company wants to expand beyond the San Francisco area into Southern California. Bank Plus, parent of Fidelity Federal Bank, has $2.8 billion of deposits at 37 branches in the Los Angeles market.
"We are looking at a number of depository institutions, including those that have shareholder unrest," Mr. Heaberlin said in an interview this week.
Bank Plus' largest shareholders have been pushing for a sale since last summer, after the company announced major losses in its mortgage-backed securities business. The company later took massive chargeoffs in its credit card portfolio, which led to 1998 losses of $56.3 million, or $2.90 per share.
Bank Plus had outstanding credit card balances of $292 million as of May 31.
The thrift's stock hit a low of $2.012 per share in September but has slowly rebounded. Bank Plus shares rose 3.5%, to $5.5625, in trading by late Thursday afternoon.
Neil Osborne, director of investor relations at Bank Plus, would not confirm that Bay View had made an offer, saying only that the thrift company is still seeking a buyer. "The sales process continues, and we have set no deadline," he said.
Analysts said the deal would be a good one for Bay View as long as the credit card portfolio is not included. They said Bay View is hungry for deposits to support its purchase of Franchise Mortgage Acceptance Corp., which originates loans for restaurants, convenience stores, and service stations and later sells them to Wall Street.
By gathering more deposits, Bay View would be in a position to hold, rather than sell, loans that Franchise Mortgage originates, analysts said.
"A thrift like Bank Plus is exactly what they need," said James R. Bradshaw of Pacific Crest Securities in Portland, Ore.
"It would be a nice acquisition," said Erick J. Reim of U.S. Bancorp Piper Jaffray in Minneapolis. "It wouldn't surprise me if it happened."
Still, Mr. Reim warned that a deal for Bank Plus could depress Bay View's stock before the Franchise Mortgage transaction closes in August. He said investors may be uneasy about buying a thrift with a troubled past while at the same time trying to integrate Franchise Mortgage.
Bay View is unlikely to announce any acquisition before September, Mr. Heaberlin said.
Bank Plus has retained two investment firms to handle a potential sale - Keefe, Bruyette & Woods Inc. in New York and Friedman Billings Ramsey & Co. in Arlington, Va.