The distressed-asset specialist Wilshire Financial Services Group Inc. announced an agreement this week to buy control of Royal St. Georges Banque, a French mortgage lender.
Wilshire, based in Portland, Ore., said Tuesday that it is buying 99% of the stock of Royal St. Georges. Terms of the deal were not disclosed.
Paris-based Royal St. Georges is the residential mortgage unit of a British insurance company, Commercial Union.
The deal would give Wilshire "full-service banking capability throughout the European Union," said Wilshire chief executive Andrew Weiderhorn.
Royal St. Georges has 50 employees in Europe, most of them in France.
Wilshire's move reflects a trend for specialty finance companies to establish operations overseas.
Many, including Wilshire, Southern Pacific Funding Corp., and Firstplus Financial Group, have already set up mortgage operations in Britain and are planning to expand throughout Europe.
Southern Pacific, which has been making mortgages in Britain for a year now, recently hired a former Greenwich Capital Markets investment banker to explore acquisitions in other European markets, said William Cherry, head of the finance company's U.K. division.
Wilshire already has loan and real estate servicing and real estate and mortgage acquisition offices in Britain, France, Ireland, Italy, and Mexico, it said. It employs 81 people in Europe.
Upon closing of the deal, Royal St. Georges is to be headed by Philippe Mamez, managing director of Wilshire's French operation.
Wilshire also said Tuesday that it had bought 180,000 shares of its own common stock during August under a repurchase program authorized in 1997.
"Our stock repurchases reflect our belief that the current price of the company's stock represents a compelling value," said Mr. Weiderhorn. Wilshire stock, as well as that of other specialty finance companies, has dropped significantly in value in the past month, far surpassing fluctuations of the general market.
Wilshire's stock closed at $9.375 a share after the news Tuesday, up 75 cents.