Magazine article American Banker

Barnett in Antitrust Spotlight

Magazine article American Banker

Barnett in Antitrust Spotlight

Article excerpt

Barnett Banks Inc.'s pending acquisition of First Florida Banks Inc. is expected to face close scrutiny from the U.S. Justice Department.

The agency has been taking a tougher stand on antitrust enforcement recently, pressuring acquirers to divest loans and deposits in other in-market mergers.

Analysts, noting that the Barnett and First Florida franchises overlap heavily in the Tampa-St. Petersburg area, said this deal could also require divestitures to pass Justice Department muster.

Barnett, based in Jacksonville, said it does not expect to make any material divestitures of First Florida assets or deposits. "We have no indication we have an antitrust problem, and we do not believe we have an antitrust problem," said Burnett spokesman Robert Stickler.

Officials at the Justice Department could not be reached for comment.

Investors on the Alert

Analysts cite investor concern over antitrust implications as one reason why Barnett's stock price fell $3.25 a share Monday, when the deal was announced.

"There's a great deal of uncertainty surrounding this situation," said Timothy G. Rayl, banking analyst with Southeast Research Partners in Boca Raton.

Mr. Rayl said he has identified "half a dozen" counties where market share concentration could cause Barnett some antitrust problems.

Barnett, for example, would end up controlling 34% of bank deposits in populous Hillsborough County, where Tampa-based First Florida is headquartered, up from its pre-merger 19%. …

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