New Investor Group Is Negotiating to Buy Lincoln Savings

A week after one sales agreement expired, the parent firm of Lincoln Savings & Loan apparently is close to an agreement to peddle the Irvine-based S&L; to a new group of investors.

The prospective buyers, whose names were not disclosed, this week filed an application for approval with the state Department of Savings and Loan, according to an agency official and a spokesman for Lincoln’s parent firm, American Continental Corp. in Phoenix.

The Department of Savings and Loan will release information on the new filing next week, said Shirley Thayer, an agency staff attorney.

The deal is similar to the one that had been negotiated with an investor group headed by longtime S&L; executive Spencer Scott, another regulatory agency source said. Under terms of that agreement, American Continental would have received $288.75 million of newly issued Lincoln preferred stock and would have bought three of the S&L;’s assets for $390 million.

The Feb. 28 deadline for that sale passed without a final agreement being reached. Scott has said he is trying to keep the deal alive, though it must be renegotiated.

Robert J. Kielty, the firm’s general counsel, confirmed that a new prospective buyer had filed for state approval. Though American Continental is a public company and, therefore, required to divulge matters that materially affect it, Kielty said the company would not comment further.

Typically, a buyer and a seller reach at least a tentative agreement before the buyer files for regulatory approval. But many lawyers and consultants to mergers are starting to file parts of applications before a formal agreement is reached.

“We want to get the feelings of regulatory authorities as the deal progresses,” said Gary Findley, a Brea lawyer who specializes in banking and S&L; law. “If the regulators can’t digest the deal, we might as well not proceed.”

Just before the Feb. 28 deadline on Scott’s deal passed, Charles H. Keating Jr., chairman of American Continental, was quoted by a trade publication as saying his firm had eight potential buyers for Lincoln should the deal with Scott’s group fall through.

Neither Keating nor Scott could be reached for comment Thursday.

The company’s stock, which had steadily plummeted from $7 a share on Feb. 2 to as low as $3.25 a share on Feb. 28, closed Thursday at $4 a share, up 12.5 cents.