Activist investor Jerome Davis is becoming less active in a small Iowa thrift's affairs, but another investor may become more so.
According to documents filed May 2 with the Securities and Exchange Commission, Mr. Davis bought 9,000 shares of Mid-Iowa Financial Corp. stock in April, boosting his ownership to 5.38%.
Yet despite the increased stake, he's pulling back from calls for the $115 million-asset thrift to find a buyer.
The Greenwich, Conn.-based investor said he's pleased with Mid-Iowa's earnings growth and its stock performance in particular. As a result, he said in an interview, he did not restate recommendations made as recently as January that the company should find a buyer.
However, he said he wouldn't necessarily oppose a decision by management to negotiate with potential buyers if the price was right, particularly if management foresees earnings flattening out.
"The company has done an excellent job at enhancing value for shareholders. I wish all the thrifts that I own have provided similar results," Mr. Davis said. "On the other hand, I don't know how they're going to create value in the future."
Mr. Davis said he would support a sale price of at least $10 per share, or about 140% of book value. The stock is currently trading at $7.50, while book value is $6.70.
Officials at Mid-Iowa in Newton did not return telephone calls.
Meanwhile, a possible buyer has emerged. Just two weeks before Mr. Davis' January pronouncement, West Des Moines-based Liberty Financial Corp., a $610 million-asset holding company for eight banks, and its three controlling shareholders bought up a combined 7.30% stake of Mid-Iowa stock.
The investors stated in their SEC filing that they bought the shares "solely for investment purposes." But they also stated that they might later seek to influence or even acquire Mid-Iowa.
Liberty representatives have tried to meet with Mid-Iowa officials, but the latter refuse to meet "at this time," said Russ Olson, president and CEO of Liberty. "We'd just like to know what their plans are."
The change of tactic is unusual for Mr. Davis, who is known for taking sizable positions in thrifts and then making persistent requests that they sell. He began pushing Mid-Iowa management in July and August 1995 to boost shareholder value by finding a buyer. He repeated that recommendation in late January 1997, when his ownership dropped to 4.84%.
But because of the thrift's performance, he dropped that call in his May filing.
