Major Stockholder Seeks Fidelity Federal S&L; Sale

In a move that could renew turmoil at Fidelity Federal Savings & Loan, a major shareholder said Monday that he plans an attempt to oust several directors of the parent company and seek its sale.

Alfred Roven, a Los Angeles businessman who owns 9% of the stock in Citadel Holding, the parent of Fidelity, said in a filing with the Securities and Exchange Commission that he has applied for permission to acquire up to 24.9% of Citadel’s stock.

Roven, who is on the Citadel board, told the SEC that he plans to solicit written consents from stockholders for a series of proposals that would oust virtually all of the directors. He also said he would recommend that a buyer be sought for the company’s outstanding stock “at a price that is favorable to all the shareholders.”

Fidelity Federal Savings, based in Glendale, has more than $3 billion in assets, placing it among the top 20 S&Ls; in California. The institution was shaken by management and shareholder turmoil in 1985 and 1986 when a planned merger with Great Western Financial was blocked, partly through Roven’s efforts. Citadel agreed in April to pay Great Western $6 million to settle a lawsuit growing out of the merger failure.

James Taylor, chairman of Citadel, said Roven’s new moves were a surprise to officials at the company. He said that an investment group headed by another board member, James Cotter, received federal approval several months ago to increase its stake in Citadel to 24.9%.

Roven and Cotter, who were aligned in fighting the Great Western takeover, parted ways some time ago, according to a lawyer familiar with the corporation.

Roven said in the filing that he is “currently concerned about the state of affairs” at Citadel and Fidelity Federal. However, the filing did not explain his concerns, and an associate said Roven was not available for comment Monday.

Lorna Thompson, a spokeswoman for the Federal Home Loan Bank in San Francisco, confirmed that Roven has an application pending to increase his stake in Citadel. She said Roven had filed similar applications before but that they had never reached the point where the board had to make a decision.