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Friday, Sep 29, 2023


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The cast of players keeps changing at Beverly Hills brokerage Dabney/Resnick/Imperial LLP.

First, co-founder Neil Dabney split off from the then-named Dabney/Resnick Inc. late last year, just as Torrance-based Imperial Credit Industries Inc., under the leadership of Chairman H. Wayne Snavely, became a major creditor with an option to take a 49 percent equity stake in the brokerage.

The seven-year-old brokerage soon after announced that Don Peterson, from Montgomery Securities Inc. before going into private practice, had been hired to rev up investment banking, on the equities side.

Dabney/Resnick/Imperial’s forte has been in bonds, particularly high-yield IOUs. Peterson was hired to add balance to the firm, strengthening equity offerings. In talking to us when he was hired, he spoke of a “regional powerhouse” in equities. But Peterson quit last month, after two months on the job.

Also departing last month was Murray Feinbaum, the former chief operating officer.

Feinbaum was in charge of running the shop, keeping abreast of regulations, growing the business which Dabney/Resnick/Imperial has been doing, now with 130 employees and counting.

Others, such as chief analyst Larry Post, former director of research at Drexel Burnham Lambert Inc., have disembarked too.

Why the departures?

Word from some is that Judy Resnick, remaining name partner, is headstrong and tough to work for. Resnick acknowledges that she can be demanding, but says that comes with the territory.

“When you are a CEO, you can’t always be a nice guy,” she said. “That’s a job of CEO. If I didn’t do some of the things I have done, they would say I am wishy-washy.”

At the same time, Resnick said she believed Peterson and Feinbaum left because of the nature of the work, not because of her actions.

“Murray was a great hire, he helped build up the business, but it is a grueling job of 16-hour days,” said Resnick. “He wanted a break.”

She called Peterson’s departure a “non-event. I don’t think I talked to him for more than 20 minutes in his entire time here. He’s great guy, and he is still a consultant to us.”

The affairs of Dabney/Resnick/Imperial are of keen interest to Snavely at Imperial, and he met with Resnick last week. Personnel matters were on the agenda.

“I am more concerned about the departure of Murray (Feinbaum) than Peterson,” Snavely said.

With an option to buy 49 percent of Dabney/Resnick/Imperial, and no bar on going to more than 50 percent, it may be Snavely who calls the shots at Dabney/Resnick/Imperial in the future. But he may not exercise the option.

“That why we structured it as a loan,” he said. “It’s a way to get to know a company, before going in.”

Thrifts and banks

The institutional shareholders want to sell Great Western Financial Corp. and H.F. Ahmanson & Co. But not one to the other, said market observers.

As we have noted, the institutional ownership of the two big local thrifts is extremely heavy.

The same five institutions money management firms, such as Los Angeles-based Hotchkis & Wiley that own 26 percent of Great Western also own 38.5 percent of Ahmanson. More than 80 percent of both thrifts’ stock is institutionally owned.

The institutions know if they agree to sell Chatsworth-based Great Western to Irwindale-based Ahmanson, then Ahmanson may become too large for another bank or thrift to buy.

Then the institutions would get the premium of a takeover only once.

But if both thrifts are sold to out-of-staters, the institutions reap windfalls on both stocks.

Separately, the institutions don’t want Ahmanson to buy Great Western, if the cost becomes so high that it lowers the value of Ahmanson, post buyout.

Great Western CEO Jim Maher has been busily erecting costs, such as a generous employee severance package, that may depress Ahmanson’s stock price following a buyout.

Banks barriers

Speaking of foiling takeovers, the Beverly Hills-based City National Corp. (parent of City National Bank), long the stronghold of the Goldsmith family, last week adopted a “stockholder’s rights” plan.

Bram Goldsmith, 73, is the longtime chairman of City National, and son Russell, 46, is vice chairman and CEO.

The stockholder’s rights plan allows existing shareholders to buy an additional number of shares on favorable terms for every share they own, should any entity acquire more than 10 percent of City National stock in the future (except the Goldsmiths, who already own more than 10 percent).

Any entity that bought more than 10 percent of City National stock in the future would not be able to participate in the new stock rights.

What the plan does, essentially, is increase the number of shares outstanding if there is a takeover threat, while holding the would-be takeover entity’s stake flat, in absolute terms, or reducing it, in percentage terms.

The plan, which would unilaterally reduce the value of a takeover artist’s shares, is legal, said Frank Pekny, City National spokesman. “Similar plans are in effect at many other companies,” he said.

The plan would also prompt existing shareholders to buy more stock, if a takeover threat looms. Any shareholder not exercising rights is in the same boat as the takeover entity: Their existing shares become diluted.

How is this City National plan good for shareholders, given that most hostile buyouts result in huge premiums over pre-existing market price for existing shareholders?

“It allows for management to have sufficient time to evaluate and make appropriate responses on behalf of all shareholders,” said Pekny. “You have to remember the Goldsmiths are shareholders too, and want shareholder appreciation also.”

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