Hilltop Holdings Seeks Possible Business Combonation With Downey Financial (DSL)

In a 13D filing on Downey Financial Corp (NYSE: DSL), Hilltop Holdings disclosed a 6.8% stake (1,891,413 shares). In the filing, the firm said it has identified the Downey Financial as a potential candidate for an acquisition or strategic transaction. The Chairman of Hilltop met with representatives of the company and indicated it seeks discussions regarding the Downey's long-term strategies, including a potential business combination.

From the filing:

"Following the sale of substantially all of its assets on July 31, 2007, the Reporting Person is engaged in the evaluation of potential candidates for acquisitions and strategic transactions. As part of this evaluation strategy, the Reporting Person identified the Issuer as a potential candidate for an acquisition or strategic transaction. The Reporting Person’s purpose in acquiring the Shares was to obtain a meaningful equity position in the Issuer.

On November 16, 2007, Mr. Gerald J. Ford, Chairman of the Reporting Person, met with representatives of the Issuer, including Mr. Maurice L. McAlister, Chairman of the Board. During that meeting, Mr. Ford indicated that the Reporting Person had accumulated a meaningful equity investment in the Issuer. Mr. Ford also indicated that the Reporting Person contemplates seeking discussions in the near-term with the Issuer, either through oral or written communications, regarding the Issuer’s long-term strategies, including a potential business combination."