Former Insider Makes Counteroffer for Warehouse Lender

Esposito Global, Dallas, is making a counteroffer for SWS Group Inc., the parent of mortgage warehouse lender Southwest Securities FSB.

The offer of $8 per share tops the offer of $7 per share made by Hilltop Holdings Inc. Hilltop, which is controlled by former First Nationwide and First Gibraltar executive Gerald Ford, already owns 24% of SWS. Hilltop is the parent of mortgage banker PrimeLending.

The Esposito offer appears to meet the objections of SWS investor Lone Star Value Management, which previously said the Hilltop offer undervalues Dallas-based SWS by at least $1 per share.

Esposito Global is headed by Michael Esposito, who started SWS' portfolio trading business, his company's press release said.

A special committee of the SWS board formed to review the Hilltop offer will also now review the Esposito Global offer as well, a press release from SWS states.

Sandler O'Neill + Partners, L.P. is serving as the special committee’s independent financial advisor and Davis Polk & Wardwell LLP is serving as its independent legal advisor.