Sale Has Not Been Set, First Southwest Says; Suitor Hasn't Given Up

DALLAS - First Southwest Co. yesterday denied rumors that it had been sold, and a spokesman for the leading suitor said talks are continuing.

"We did not sell this firm," said Richard H. Litton, president of the Dallas-based investment banking firm and nationally known financial adviser.

Competing investment bankers yesterday said First Southwest reportedly had consummated a deal with a group led by Dallas financier Robert Utley. The purchase price, they said, was 1.5 times book value - or as much as $18 million.

Andy Stern, a spokesman for Mr. Utley, confirmed that no final agreement had been reached, but added, "Clearly, they're negotiating."

A former First Southwest executive said the firm has been seriously reviewing an offer from the Utley group with advisers from Bear, Stearns & Co. of New York City.

The official and others said the Utley bid was considered the best of three offers. The others were placed by Dallas-based Rauscher, Pierce, Refsnes Inc. and a group reportedly led by Malcolm Lovett of Houston.

Mr. Lovett, now affiliated with the start-up brokerage of Coastal Securities in Houston, declined comment on rumors that he had submitted a $50 per share bid for the company.

Executives at Rauscher Pierce have confirmed that they have aggressively bid for their smaller, crosstown rival since the death in March of C. Rader McCulley, First Southwest's chairman and second-largest stockholder.

The future of the firm, ranked number one as a financial adviser in the state and seventh nationally last year, has sparked interest in Texas because the fallout from such a transaction could mean new opportunities or competition for other firms.

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