Friday, May 29, 1998

Estate gains
$60 million from
S&L investment

Bishop holdings in the
California company pay off
handsomely after the
firm goes public

By Rick Daysog


Bishop Estate stands to gain about $60 million from its investment in a Los Angeles savings and loan that went public earlier this month.

PBOC Holdings Inc., parent of the 19-branch Peoples Bank of California, began trading on the Nasdaq market on May 13 in an initial public offering valued at about $174 million.

That gave the estate, PBOC's largest shareholder, a market value of about $104.6 million for its 7.6 million shares of the company.

The estate has sold some shares at an undisclosed price and received $4 million in dividends and $11.3 million in payments on senior notes that it owned.

"The trustees have done a real good job of bringing this investment to the position where it is now," said Kekoa Paulsen, Bishop Estate spokesman.

In many ways, the estate's investment in the southern California thrift reads like a textbook example of a business turnaround.

Bishop Estate initially invested $30 million in PBOC, then known as SoCal Holdings Inc., in 1992 with former U.S. Treasury Secretary William Simon. But it had to add $42.5 million in 1995 to bring the savings and loan up to federal regulatory standards.

At the time, the bank's business had been hurt by the California recession and the downturn in real estate values.

The company is now profitable, with the California economy's rebound.

Currently, the estate owns 4.8 million shares, or about 22 percent, of PBOC's stock outstanding. Based on today's closing price of 141/8, the estate's holding is valued at about $67.8 million.

The estate remains PBOC's largest single shareholder. Other big shareholders include Brierly Investments Ltd., the New Zealand company that owns Molokai Ranch, and Simon's Arbur Inc.

The deal is one of several mergers and initial public offerings that the estate has taken part in during the past several years.

The nonprofit charitable trust, which operates Kamehameha Schools, scored a paper gain of $19 million in March from its investment in Mid Ocean Ltd., which was acquired by Exel Ltd.

It also has benefited from a big stake in Saks Fifth Avenue, which went public in 1996.

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