After a pleasant start, things changed quickly following the crash of both the real estate and equity markets in 2008’s second half. Like virtually every other bank in America, Western Alliance was preoccupied with its real estate loan portfolio.
Within a few years, the bank proposed merging Shine’s firm with that of the advisor who had gotten her interested in selling to Western Alliance in the first place. Given that her firm was far more profitable but slightly smaller in assets at $350 million, placing a value on each of the two firms was vexing.
What she had going for her was a put option to sell her remaining 20% stake for $3 million. At one point, the bank proposed she buy out its majority stake for $12 million. She refused.
After a failed attempt to replace her as CEO, the bank put Shine’s firm on the market. A bank in Denver tentatively offered $10 million. A few potential buyers showed up, including United Capital CEO Joe Duran, who asked what was going on.
Despite the bank’s reassurance that Shine’s firm posed no troubles, Duran quickly concluded otherwise—that if Shine left, most of her clients would have followed. Out of her loyalty to those clients, Shine says she would have stayed under fair and reasonable circumstances. But Duran walked.
Then things began to fall into place for Shine. By the fall of 2012, she was able to buy back her firm for an undisclosed price, somewhat more than her $3 million put option but for far less than what the Denver bank asked for.
When it was over, she realized she had led a charmed life. It took a few years “to recover and feel the world was a good place,” she says.
In the meantime, she has been adding partners and reducing her own equity stake as she lays the ground for succession. By the end of 2020, she will own 45% of the firm.
Bob Wacker
Wacker Wealth Partners