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BAUPOST GROUP FILES PROXY MATERIALS WITH SEC

 CAMBRIDGE, Mass., May 13 /PRNewswire/ -- The Baupost Group, Inc., a registered investment advisor in Cambridge, announced today that it and certain related parties have filed proxy materials with the Securities and Exchange Commission in connection with plans to wage a proxy contest at the annual shareholders meeting of Providential Corporation (NASDAQ: PHIP), scheduled for June 1, 1993. Baupost, which beneficially owns 24.1 percent of the outstanding stock, will nominate 5 candidates for director, and will seek the defeat of two compensation plans which require shareholder approval.
 Baupost also filed suit against Providential in Delaware Chancery Court alleging that the company's proxy statement is misleading and that the incumbent directors has breached their fiduciary duties in connection with the approval of the compensation plans and employment agreements with the CEO and executive vice president. The suit seeks to enjoin both the holding of the annual meeting as scheduled and the implementation of the disputed compensation plans, as well as other relief.
 Seth A. Klarman, president and director of Baupost, stated: "The actions of the current directors in approving excessive compensation plans and employment agreements, particularly when the price of the stock has plummeted over 70 percent from its high of $27.50 in early 1992 after the initial offering, demonstrate that they do not deserve the support of the shareholders and should be replaced. Bill Texido, the CEO, and Feroze Waheed, the executive vice president, were granted 235,000 options at $4 per share, $4.50 less than the closing price on the grant date and more than $10 less than the company's current book value. They were also given the right to purchase 147,600 shares at one-hundredth of a cent per share. Even if Baupost defeats the compensation schemes, the directors, through employment contracts, have agreed to pay Texido and Waheed the economic equivalent of those stock give-aways.
 "As the largest single shareholder, we cannot allow this blatant disregard for the legitimate rights and interests of all the shareholders to stand, especially since the company's own graph shows that its performance has been substantially below that of its peer group. The current board, which is also entitled to purchase shares at $4 per share under one of the contested plans, has effectively forfeited its right to represent the shareholders.
 "It is time for a change. It is time for the election of directors who will be responsive to the interests of shareholders, not management's pocketbooks."
 Baupost's nominees are: Mr. Klarman, David C. Abrams, Thomas A. Knott and Paul H. O'Leary, all of whom are investment managers at Baupost, and Paul C. Gannon, chief financial and administrative officer of the Baupost Group.
 Providential, which is based in San Francisco, is engaged in the origination, funding, servicing and selling of reverse mortgage loans.
 -0- 5/13/93
 /CONTACT: C. Brian Maddox, 212-440-9862, or Arthur B. Crozier, 212-440-9861, both of Georgeson & Company, Inc., for Baupost Group/
 (PHIP)


CO: Baupost Group, Inc.; Providential Corporation ST: Massachusetts, California IN: FIN SU:

WB-OS -- NY067 -- 8226 05/13/93 15:15 EDT
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Publication:PR Newswire
Date:May 13, 1993
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