The controversial owners of Miami's Capital Bancorp may be selling out before they're forced to get out. The $1.7 billion-asset company last week revealed that it was in "discussions with several parties concerning a possible merger transaction." Capital's majority owners, members of the Holtz family, have been ordered by state regulators to relinquish control. Florida's comptroller issued an order June 16 that declared the Holtz family "unfit" to control Capital, which family patriarch Abel Holtz founded 23 years ago. Abel Holtz resigned from Capital in 1994 before pleading guilty to lying to a federal grand jury. Last year, he was banned from the bank by federal regulators. But the family, which includes Abel, his wife, Fana, and sons, Daniel and Javier, still owns 56.7% of Capital's outstanding shares. Mrs. Holtz is the company's vice chairman; Daniel is chief executive officer and chairman; and Javier is executive vice president of Capital Bank. An attorney for the family had said the Holtzes planned to fight Comptroller Robert F. Milligan's order in court. But a sale could avert what was expected to be years of litigation. "I had the impression they wanted to take this to the end," said Joseph Gladue, a bank analyst at Chapman Co. in Baltimore. "Now the question is what price they might get." The order, which gave the Holtzes 90 days to reduce their stake to less than 25%, had spurred speculation that Capital would soon go on the auction block. The stock closed at $18.69 per share Thursday, after officials announced the merger talks, up from Monday's price of $17.92 on volume of 14,000 shares. Just the week before, only 500-600 shares had traded per day. But Capital officials wouldn't elaborate on the announcement, nor would they confirm a Miami Herald report that named Union Planters Corp. of Memphis as the likely buyer. The article quoted an official from the Florida Department of Banking and Finance as saying that an attorney representing Capital Bank told his office the two banking companies had signed a letter of agreement. The official, Richard T. Donelan Jr., assistant general counsel in the state agency, would not return telephone calls. Benjamin W. Rawlins Jr., Union Planters' chairman and chief executive officer, could not be reached for comment. But analysts who follow Capital said such a union would make sense. Union Planters, a $15 billion-asset company, has been itching to get into Florida, said Ken Thomas, a bank analyst in Miami. Besides, he said, Union Planters, which has 34 locally operated subsidiaries, might allow many Capital Bancorp employees to keep their jobs. "If you want to maintain your position, you call Union Planters," Mr. Thomas said. The Memphis company "would more than likely place (Daniel) Holtz as president of its Florida bank. As that bank expanded, it would put him into a very good position." But whether shareholders would go along with a deal brokered by existing management is in doubt. Eugene Stearns, an attorney for four dissident shareholders who have waged a three-year battle against the Holtzes, said shareholder approval would likely depend on what the Holtz family receives in a merger deal. "If there are any benefits that accrue to the Holtzes, it's fair to say a large block of shareholders will oppose it," he said. "Why agree to a deal now when they can make a better deal when the Holtzes are gone?"
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