Billionaire investor Gerald J. Ford has bought a 6.8% stake in Newport Beach-based savings and loan operator Downey Financial Corp.
Ford made the investment through his company Hilltop Holdings Inc. of Colorado.
Hilltop Holdings bought 1.9 million shares of the Downey, which runs Downey Savings and Loan.
According to reports, Ford met with Downey Chairman Maurice McAlister Friday to discuss Downey’s future. Potential long-term arrangements could include an acquisition, according to Reuters.
McAlister, 82, is Downey’s largest shareholder with 20% of its shares. He cofounded the thrift in 1957 with the late Gerald H. McQuarrie.
Shares of Downey have fallen more than 50% for the year as the company struggles with rising defaults on its loans.
Shares of Downey were up as much as 14% Monday after hitting a seven-year low last Thursday. The company has a market value of about $970 million.
Ford, 62, is a Texas banker known for buying and selling thrift banks, including Golden State Bancorp, which he sold to Citigroup Inc. for $6 billion in 2002.
Last spring he backed away from a potential investment in Santa Monica-based Fremont General Corp, which recently hired Stephen Gordon, formerly of Irvine’s Commercial Capital Bancorp Inc., as its turn around chief executive.
Hilltop Holdings runs a property and casualty insurance company, and has a market value of $677 million.
