Magazine article American Banker

Banc One, Mellon Also Spurn Bank of Boston

Magazine article American Banker

Banc One, Mellon Also Spurn Bank of Boston

Article excerpt

Bank of Boston Corp. entered last weekend close to a merger agreement with CoreStates Financial Corp., but by Monday CoreStates and two other suitors had turned away from any potential deal.

Bank of Boston's negotiations with CoreStates, under heavy fire from shareholders and analysts, were ended late Saturday.

A bid by Banc One Corp. to pay a slight premium also was withdrawn, and Mellon Bank Corp. said it was no longer pursuing the $45.3 billion-asset Boston bank.

But there were still rumors of possible interest from BankAmerica Corp., NationsBank Corp., and perhaps even Canadian banks.

The latest spurning of Bank of Boston, which had been left at the altar several times before, raised serious doubts about both the merger-of-equals approach and Bank of Boston's prospects of finding a partner.

The bank has insisted on keeping its headquarters in Boston and otherwise maintaining its corporate identity on a par with any merger partner.

But analysts said that for such an arrangement to work, a merger would have to offer cost-cutting opportunities that did not exist for CoreStates and Bank of Boston, which have little geographical or line-of-business overlap.

"The market is looking a bit askance at a merger of equals where there doesn't seem to be a clear strategic rationale," said Francis X. Suozzo, a bank analyst at S.G. Warburg & Co.

The stock market reacted negatively last week to news of the CoreStates- Bank of Boston talks, in contrast to the mixed-to-favorable reception of the First Chicago Corp. …

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