Conseco's CEO, CFO Quit in Merger Failure
CARMEL, Ind. - Conseco Inc.'s chairman and chief executive officer, Stephen C. Hilbert, and chief financial officer Rollin M. Dick quit Friday in the wake of the company's ill-fated attempt to build a financial supermarket with the purchase of a consumer lender two years ago.The news came as the company reported a 64% first-quarter earnings decline. In early April, Conseco said that it would sell Green Tree Financial Corp. after a two-year struggle to meld the specialty lender into its operation.
David V. Harkins, the president of Thomas H. Lee Partners, which invested $500 million in Conseco last year is to be Conseco's interim chairman and chief executive. Thomas A. Hagerty, a managing director at Thomas H. Lee, was elected to Conseco's board.
DLJ to Buy a Junk-Bond Advisory Firm
NEW YORK - The investment management arm of Donaldson, Lufkin & Jenrette Inc. said Friday that it is buying a registered investment adviser to broaden its non-investment-grade bond business.Terms of the deal for First Dominion Capital LLC's asset management division were not disclosed. The transaction is expected to close June 1, said G. Moffett Cochran, chairman of DLJ Asset Management Group.
DLJ Asset Management has been seeking to expand its junk bond franchise into the leveraged-loan business for about a year and a half, Mr. Cochran said. "First Dominion Capital has an excellent track record, particularly in the loan area."
Eighteen people from First Dominion Capital are expected to join DLJ Asset Management's junk bond team, bringing the total in that unit to 25. The company expects to continue beefing up the team, Mr. Cochran said.
First Dominion, formed in 1997, is a registered investment adviser managing about $2.5 billion of leveraged loans, high-yield bonds, and mezzanine debt. It is a subsidiary of Dominion Capital Inc., the financial services arm of Dominion Resources Inc., an energy holding company headquartered in Richmond, Va.
Dominion Resources is divesting the businesses of Dominion Capital over the next three years, a spokesman said. DLJ Asset Management manages about $30 billion of assets.
- Cheryl Winokur
S&L Groups Say Freddie Violates Charter
WASHINGTON - Several savings and loan trade groups are saying Freddie Mac is violating its charter by participating in a joint venture Internet brokerage company formed last month with Microsoft Corp. and four banks.In a letter to Rep. Richard Baker, R-La., last Thursday, officials of savings and loans groups from several states asserted that Freddie's "financial interest" in the new company amounts to an equity investment in a mortgage origination company and should not be permitted. Freddie Mac is barred by its charter from originating mortgages.
Microsoft holds a majority stake in the new business, in which the four banks are investors. The letter asserted that, according to a senior official of Freddie Mac, the government-sponsored enterprise would hold perpetual subordinated debt and could earn equity warrants if the company is successful. The venture plans to take applications, process them, and underwrite loans, which would be bought by Freddie.
Freddie Mac did not respond by presstime to a request for comment.
- Erick Berquist
Unit Holders Back Allianz's PIMCO Deal
NEWPORT BEACH, Calif. - PIMCO Advisors Holdings said Friday that unit holders have approved German insurer Allianz AG's deal to buy all of it and about 70% of its PIMCO Advisors.The $4.7 billion deal, announced in October, is expected to close Friday.
PIMCO Advisors has more than $260 billion of assets under management, including a family of 55 stock and bond mutual funds available to both retail and institutional investors.
Dime and Hudson United Call Off Merger
Dime Bancorp and Hudson United Bancorp said after Friday's market close that they would terminate their pending $1.5 billion merger agreement.Dime, which faces a $1.9 billion hostile bid by Melville, N.Y.-based North Fork Bancorp., said it would consider its strategic options. Dime, a $24.2 billion asset thrift company based in New York, said the North Fork bid is "inadequate" and "fraught with risk."
Chairman and chief executive officer Lawrence J. Toal said Dime is seven times larger that North Fork's next largest acquisition. "North Fork is biting off more than it can chew," he said.
In the joint press release, Dime and Hudson, based in Mahwah, N.J., said they agreed to cancel stock options granted in connection with the merger.
They said Hudson United would be entitled to receive $50 million to $92 million if Dime is bought, merges with another company, or sells off a substantial amount of its assets before Oct. 28, 2001. Dime will pay Hudson $15 million if none of these events occur.