Guaranty Financial Group Inc. in Austin said Tuesday that it would sell what could amount to nearly 20% of the $16.4 billion-asset company to the billionaire Robert Rowling.
Mr. Rowling is the chairman of TRT Holdings Inc., an Irving, Tex., firm that owns the Omni Hotel chain and Gold's Gym International.
Guaranty said that Mr. Rowling has formed an investment group, TRT Financial Holdings LLC, that would acquire 7.4 million of Guaranty's unissued shares for $38.4 million. That purchase is expected to close by June 2.
Also, 120 days after the common stock purchase, he would acquire convertible preferred stock that, when fully converted, could give Mr. Rowling a 19.9% stake.
The timber company Temple-Inland Inc. spun off Guaranty at the end of December. In its first quarter as a stand-alone company, Guaranty lost $10 million as nonperforming assets, particularly in its California markets, soared 59% from just three months earlier, to $284 million.
The company eliminated 135 jobs in the first quarter, and on May 1 it announced plans to raise $300 million in a rights offering, which analysts said would increase its ratio of tangible capital equity to tangible assets to more closely in line with the industry average.
In a news release, Guaranty president and chief executive officer Ken Dubuque said that Mr. Rowling's investment, combined with the previously announced rights offering "will allow us to fortify our balance sheet and support long-term growth."
Guaranty's shares, which began the year at $15.50, fell to as low as $5 last week, but they rebounded slightly on the news of Mr. Rowling's deal. By late Tuesday the shares had climbed 14.4% from Friday's close, to $6.19.
Mr. Rowling is listed at No. 49 on Forbes' list of the 400 richest Americans, with an estimated net worth of $6.4 billion. In addition to owning Omni and Gold's, TRT Holdings is involved in oil and gas exploration. It is an investor in a major Mexican retailer and various real estate ventures.
