Fremont, Ford Talks Officially Scuttled

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Fremont General Corp. has broken off talks with a group led by Texas billionaire Gerald J. Ford that had planned to make an $80 million investment in the company.


The struggling Santa Monica-based lender and bank said in a statement Wednesday that it couldn’t reach an agreement with Ford, the former chief executive of Golden State Bancorp. It has been rumored on Wall Street that if Ford had made the investment he would have hand picked a new management team.


Fremont said in its statement that it was “in discussions with potential new management teams” and would replace its chief executive and chief operating officer. It also said was still exploring “strategic alternatives” but declined to elaborate.


Fremont has lost more than $1 billion this year and in 2006 as a result of subprime mortgages that have gone into default. Earlier this year it closed and sold off its subprime lending unit.


Last week, the company adopted a “poison pill” strategy to “protect its investors,” the company said. The new strategy was announced after two hedge funds, Amalgamated Gadget LP and Harbinger Capital, announced respective 8.2 percent and 9 percent stakes in Fremont. Amalgamated said it was contemplating a takeover or acquisition.


Shares in Fremont dipped more than 8.5 percent Wednesday to $2.80 in afternoon trading Wednesday on the New York Stock Exchange. Shares have lost 83 percent so far this year.

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