A physician in Worcester, Mass., who raised his stake in Madison Financial Corp. to 9.4 percent from 6.8 percent last month while Madison was trying to fend off an unwanted tender offer, said Tuesday he intends to keep his stock in the bank holding company even though the market price has dropped sharply.
The price of Madison`s stock was quoted at $25 bid Tuesday on the over-the-counter market, down more than $12 from its peak in mid-November.
The stock price skidded $7 Friday after Exchange International Corp. withdrew a tender offer to pay $40 apiece for all the shares of Madison, holding company for three banks in the Chicago area.
Exchange dropped its bid a day after A. Robert Abboud, former chairman of First Chicago Corp., bought an interest in Madison that gave its management effective voting control of more than 50 percent of its shares.
”I still see the bank as a good investment,” said Dr. Charles A. Birbara. ”I think the bank is better off with Abboud`s investment in there. It increased the bank`s capital and also enhanced the book value of its stock.”
Birbara, who several weeks ago called Exchange`s offering price too low, added that ”I`m not too sure another banking firm, probably from outside Illinois, won`t eventually come in with a higher offer. But at this point, I wouldn`t let my stock go at $40.”
In a recent report filed with the Securities and Exchange Commission, Birbara said he bought 10,864 shares of Madison stock in November at undisclosed prices. That increased his holdings to 37,241 common shares.
Birbara told the SEC he was holding the stock for investment purposes only.
While he refused to say how much he paid for the shares bought in November, Birbara conceded he bought them near their highs. He also declined to say whether he is currently showing a paper profit or loss on his total investment in the firm.
”I see my investment as having very little downside risk and a potentially significant upside profit,” he said. ”I can`t see Abboud being in there without having a profit motive. He is an extraordinarily brilliant banker.”
