Ford Purchase of Fremont in Doubt

Gerald J. Ford, the former chairman and chief executive of Golden State Bancorp Inc., has told Fremont General Corp., Santa Monica, Calif., that he does not want to invest in the company under the terms of an agreement reached in May.The announcement comes amid rumors that Fremont is having trouble selling its $20 billion subprime servicing portfolio. Mr. Ford leads an investor group that agreed to put $80 million into Fremont, in exchange for a possible 20% stake. Mr. Ford was slated to become chairman of Fremont and its subsidiary, Fremont Investment & Loan. In a statement, Fremont said that while it did not agree with the factual positions taken by Mr. Ford, it is in discussions with him over revising the terms of the transaction. The convertible preferred stock the investor group was to acquire had a conversion price of $8.66 per share. Before the deal was announced on May 21, Fremont was trading in the area of $7; in the following days it went as high as $13.06 per share. Shortly before 11 a.m. Sept. 26, the day of the announcement, Fremont's stock was down $1.03 (over 20%) from the previous day's close to $4.10 per share.