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Giant Group Keeps Silent on Merger Bid

Acquisitions: Irvine-based Fidelity National wants to buy it for $49 million in stock.


IRVINE — Fidelity National Financial Inc. said that a Wednesday deadline set in connection with its unsolicited offer to acquire Giant Group Ltd. failed to generate a response from the Beverly Hills-based company.

Giant Group on Wednesday declined to comment on the deadline that Fidelity National set Feb. 15, when it offered to buy Giant Group in exchange for $49 million in Fidelity National stock.

Fidelity National executives said last week that they might initiate a proxy fight if Giant Chairman Burt Sugarman didn't respond to their offer by Wednesday. But executives at the Irvine-based title insurance company on Wednesday declined to discuss their next move.

"We remain very interested in purchasing the company," Fidelity National Vice President Andrew Puzder said. "But about all I can say right now is that we're studying our options."

Fidelity National has characterized Giant, which owns a 47% share of the Rally's hamburger chain, as an undervalued stock, given the estimated $50 million in cash, tax benefits and receivables it carries on its balance sheet.

Fidelity National Chairman William P. Foley has acquired 14.75% of Giant Group's shares in recent months, but has remained below the 15% level that would trip a "poison pill" plan that Giant Group recently adopted. The plan would make a takeover by Fidelity National prohibitively expensive.

The two companies also have traded charges in lawsuits filed in federal court in Los Angeles. Giant Group initially alleged that Fidelity National failed to comply with Securities and Exchange Commission filings when it began to accumulate Giant Group stock.

Fidelity National responded with a counterclaim that Giant Group executives had libeled its officials. The Irvine-based title company also is seeking a court injunction that would prohibit Giant from completing a stock swap that would trade Giant shares for shares in the Rally's hamburger chain.

Fidelity shares fell 25 cents to $16.50 on the NYSE; Giant lost 62.5 cents to $9 on the NYSE.

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