Commercial Federal Corp. of Omaha, which has missed earnings expectations for the last eight quarters and is working on a reorganization, has reportedly rejected a $1.3 billion stock and cash offer from a Kansas City banker and another investor.

The Kansas City Star reported Wednesday that the offer was turned down Aug. 24 by the $13.2 billion-asset company, sending the stock soaring. It reached $19.4375 Wednesday before closing at $17.625, a 4.4% increase from Tuesday.

J. Thomas Burcham, chairman of Missouri Bank and Trust in Kansas City, and John Eggemeyer 3d, president of Castle Creek Capital in Rancho Sante Fe, Calif., offered $18.50 a share, along with 25% of the common stock in the new company, Mr. Burcham said in a telephone interview. The total value of the offer was $24 a share for Commercial Federal, or $1.3 billion, he said.

"We were surprised that they turned us down," he said in an interview Wednesday. "We thought it was a good offer."

Commercial Federal chairman and chief executive officer William A. Fitzgerald could not be reached Wednesday for comment, but he told the Star the offer was considered "as not being of substantial value for the shareholders, given the restructuring that has been under way for the last six months."

This month the company said it would take $105 million to $125 million of pretax restructuring charges and shed more than $2 billion of assets, including low-yield, high-risk investments and residential mortgage loans. It said it would pay off high-cost borrowings and buy back 10% of the outstanding company stock.

Mr. Fitzgerald also said at the time he expected a middle-management restructuring that could lead to job cuts.

The buyout snub left Commercial Federal's largest institutional investor, Franklin Mutual Advisors of Arlington, Va., befuddled. Franklin has been urging the board to agree to a sale. It also arranged the election of two members to the Commercial Federal board who represented its view.

"This is a board that has no idea what fiduciary responsibility is, and they're listening to a CEO they should have fired," said Ray Garea, an executive vice president of Franklin Mutual. "This a real bid, that had real value."

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