Magazine article American Banker

Natwest's Latest Deal Makes Little Impact on N.J. Bank Stocks

Magazine article American Banker

Natwest's Latest Deal Makes Little Impact on N.J. Bank Stocks

Article excerpt

In a sign of how hot the New Jersey bank merger market has become, investors Thursday shrugged off the agreement by National Westminster Bank PLC to pay an estimated 2.4 times stated book value for Freehold-based Central Jersey Bancorp. (See related story on page 1.)

"I don't think this changes the lay of the land that much," said Thomas J. Romano, an analyst at McConnell, Budd & Downes Inc., Morristown N.J.

Big Gains Don't Materialize

The expected surges in the price of stock in other presumed acquistion targets in the state following the announcement of the $300 million deal Thursday morning, failed to materialize.

Summit Bancorp gained 12.5 cents to $21.625; Midlantic Corp. was unchanged at $29.25; and UJB Financial Corp. gained 25 cents to $27.625.

Any lift from the announcement was partly offset by a downturn in the bond market that appeared to drag down many bank issues along with the Dow Jones industrial average, which fell 40.47 points to 3,626.58.

Worthen Falls on Rumor

Similarly, widespread rumors that Worthen Banking Corp. in Little Rock is about to be acquired by a St. Louis bank failed to push its stock into positive territory. Worthen stock was off 37.5 cents at $29.125.

New Jersey analysts said another reason for the seeming indifference to the Natwest merger was that a 239% premium has become unremarkable.

Elizabeth A. Summers, banking analyst for Ryan, Beck & Co., West Orange, said Natwest agreed to paid an even higher premium for Citizens First Bancorp of Glen Rock, in a deal announced earlier this year.

On Block Since Late '93

Banks outside New Jersey have commanded similar premiums recently, Ms. Summers added.

Central Jersey had been rumored to be on the block ever since the fourth quarter, when it cleaned up its balance sheet through a bulk sale of real estate assets. …

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