Magazine article American Banker

Shawmut Rises on Report of BankAmerica Interest

Magazine article American Banker

Shawmut Rises on Report of BankAmerica Interest

Article excerpt

Shawmut Rises on Report Of BankAmerica Interest

Shares in Bank of Boston Corp. and Shawmut National Corp. diverged Friday following a report that BankAmerica Corp. is holding merger discussions with Shawmut.

The two New England companies have had parallel rises in recent weeks as takeover frenzy gripped the banking industry. Shawmut, based in Hartford, Conn., continued its rise Friday, climbing 75 cents to $10.375.

But Bank of Boston dropped 50 cents to $11.25 on the report, which appeared in The Wall Street Journal. Any talks with BankAmerica could throw a wrench into Bank of Boston's months-long courtship of Shawmut, analysts said.

BankAmerica Stock Slumps

Meanwhile, BankAmerica's stock slipped 37.5 cents to $41.875, in what was a generally declining market.

"I'm sure BankAmerica is Shawmut's preference" over Bank of Boston, Michael Plodwick, an analyst with C.J. Lawrence, Morgan Grenfell. If BankAmerica and Shawmut are talking, "it's more a sense of getting to know each other," he suggested.

All three companies declined to comment on the report.

Another acquisition by San Francisco-based BankAmerica would be an aggressive move after the announcement last Monday that it would merge with Security Pacific Corp., Los Angeles. Many observers said the addition of shawmut, which has $22.7 billion in assets and is struggling under the weight of bad loans, could create indigestion for the company.

"They would be doubling their asset size virtually overnight" if Security Pacific and Shawmut were both added, said Charles Peabody, an analyst for Kidder, Peabody & Co. …

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