Bache Group Inc. disclosed yesterday that it had rebuffed a bid by a wealthy Canadian family for two seats on its board of directors.
Bache "considered and rejected" a request to add to its board Samuel Belzberg and another representative of the Belzberg's First City Financial Corp., said a spokesman for the big New York stock broker.
The Belzbergs have been buying stock in Bache for more than a year and now own 16.8 percent of Bache, First City Financial revealed in a report to the Securities and Exchange Commission this week.
In the SEC filing, the Belzbergs for the first time hinted they may seek a voice in Bache's management. The Canadian company repeated the disclaimer made in previous filings that it has "no present plans to acquire control" of Bache.
But, the latest report added, "First City Financial intends to review on a continuing basis its investment in the issuer and depending on further developments may change its intention."
After the Belzberg report was made public, Bache disclosed the Canadians had already asked for representation on the board and been turned down.
A previous attempt by the Belzbergs to gain influence over Bache was blocked by Bache Chairman Harry Jacobs with the help of the Hunt brothers of Texas.
Jacobs persuaded Nelson Bunker Hunt and W. Herbert Hunt to buy a large block of Bache stock to keep it out the Belzberg's hands.
The Hunt brothers were major customers of Bache at that time. Their purchase of a major interest in the company later proved embarassing and is the subject of a continuing investigation by the SEC.
The Hunts together had acquired more than 5 percent of Bache, but the brothers did not immediately disclose that purchase to the SEC. Federal law requires any person or group buying more than 5 percent of a public company to disclose the purchase.
The Hunts had filed a belated disclosure statement when their purchase became known in the aftermath of the collapse of the silver market last spring. The Hunts had apparently purchased the Bache stock with silver profits. When silver prices fell, the Hunts ended up owing Bache several million dollars and were unable to pay part of the debt.
The SEC is investigating not only the Hunts failure to report their purchases, but also Bache's dealings weith a customer who was also a major shareholder.
Late last year the Hunts began selling their Bache shares and at least half of their holdings have now fallen into the Belzbergs' hands.
The Belzbergs reported they owned 1,812,000 shares of Bache as of late December. They purchased about 137,000 shares last month in a series of transactions on the New York Stock Exchange.
Neither Bache nor the Belzbergs has disclosed who the family wanted to put on the Bache board besides Samuel Belzberg, president of First City Financial Corp.
Bache's next scheduled annual meeting is not until November, giving the Canadians plenty of time to bargain for seats on Bache's 17-member board.