Loring Ward Inter- national Inc. has rejected a proposal from a group controlled by two of its own shareholders to acquire the outstanding common shares of the company.

CEO Robert Herrmann says the $108-million offer, equal to $12 a share, comes too soon after the firm’s recent commitment to provide a focused asset-management and advisor-services business. Loring Ward is a Canadian company listed on the Toronto Stock Exchange although its business is in the U.S. and its corporate headquarters are in New York.

“The terms don’t fit. We’re in the process of executing a plan. We’ve achieved some milestones but we’re a long way from finishing,” Herrmann says. “That will be a better answer for clients than a short-term sale that won’t fully value the company.”

Loring Ward sent a letter on March 21 to the Alan Werba Acquisition Corp. , a private U.S. firm controlled by Eli Reinhard, a Silicon Valley property magnate, and Alan Werba of San Jose, Calif., outlining the reasons its offer was deemed unattractive. It objects to exclusive dealing, which would deny Loring Ward shareholders the opportunity to pursue better offers; lack of committed financing; excessive tender conditions; payment of AWAC’s deal expenses; key shareholder lockups; and waiving the company’s shareholder rights plan.

Werba, a registered investment advisor with a business relationship with Loring Ward, and Reinhard, who bought the ownership stake sold by former CEO Marty Weinberg in February, together own 18.7% of Loring Ward. Loring Ward is the former Assante USA, which was spun off after CI Fund Management Inc. acquired Assante Corp.’s Canadian operations in 2003 for $846 million.

It was only last November that Loring Ward announced it was selling its business-management divisions, which served high net-worth athletes and entertainers, to focus on its other businesses.

“If you look at our past reports, you’d wonder: ‘Where is the company going? It has all these different parts but they’re not connected,’” says Herrmann. “We did a strategic review of the business, got rid of our debt and picked the golden goose. Now we’re focused on [the asset management and advisor services businesses].”

Weinberg, the Winnipeg-based founding CEO of Loring Ward, severed his last ties with the company in mid-February when he and a group of former executives, relatives and friends, sold their approximately 14% interest in the firm.

He recently founded Pavilion Investment House Ltd. (see page 8), a Winnipeg-based firm targeting ultra-high net-worth clients. He wants to use the sale’s proceeds to pursue acquisition opportunities for his new company.

“I thought it was the right thing to do considering the combination of value and what I could otherwise invest the money in,” he says.

All told, Weinberg’s group divested more than 900,000 shares at more than $11 each, for total proceeds of about $10 million. Loring Ward has a public float of slightly more than nine million shares.

Herrmann, who took the company’s top job last spring, says Loring Ward isn’t on the block and its executives aren’t conducting a search for a new owner. “We’re not interested in that. We’re going to focus on our business, grow it and let the market have an opportunity to put a value on the company,” he says. “We recommend shareholders remain patient.”

Loring Ward serves 645 independent advisors across 37 U.S. states. It has agreements with 90 broker dealers, with which most of the advisors are affiliated. The company’s turnkey asset management program for advisors includes portfolio management, operational handling of the business and marketing.

“This frees up advisors to focus on what they’re really good at and where they can have the most impact,” Herrmann says. “They were telling us they wanted to spend more time being their clients’ advisor or at their kids’ soccer game. They didn’t want to do trading, set up accounts, interface with custodians that hold those accounts, rebalance portfolios or do performance reporting, billing and fee collection.”

Loring Ward shares first traded on the TSX in early February. (They previously traded on the over-the-counter market.) The company has 2,000 shareholders, 90% of which are in Canada. The share price has risen steadily to as high as $12 from its $8.25 début.

As of Feb. 28, Loring Ward had assets under management of US$4.9 billion, an increase of US$183 million or 3.9%, from its 2006 yearend total. The company had net income US$1.6 million for the year ended Dec. 31, a 152% increase over the prior year. Revenue was US$44.9 million.

@page_break@Herrmann says that after shedding the business units, Loring Ward’s employee count dropped overnight from 330 to 80. IE