Magazine article American Banker

Advanta Stock Rises on Earnings Optimism and Takeover Rumors

Magazine article American Banker

Advanta Stock Rises on Earnings Optimism and Takeover Rumors

Article excerpt

Advanta Corp.'s shares gained more ground Monday on continued takeover rumors and new optimism about the company's earnings report due this week.

The stock, which rose $1.25 Friday, jumped another $2.06, a 5.96% gain, Monday to $36.68.

Advanta's "quarter will be better than expected," said stock analyst Thomas Facciola of Lehman Brothers. He said that the beleaguered bank's home equity business has "generated a lot of loans" in the past few months, even as the credit card business might suffer up to $1 billion in losses.

Mr. Facciola named three rumored suitors: National Australia Bank, First Chicago NBD, and G.E. Capital. He said BankAmerica Corp., another possible buyer, "dropped out."

On Friday, sources said National Australia Bank had bid as much as $42 for the stock, but Advanta turned down the offer.

"If they're turning down mid-$40 prices, they must have some interest in staying independent," Mr. Facciola said. "I thought their primary objective was to sell but maybe that's changing."

Elsewhere, positive earnings reports were not enough to lift the majority of bank stocks, as shares fell on weakness in the bond market and fears that rising consumer confidence could lead to inflations and rising rates.

The retail sales report due Tuesday and the consumer price index on Wednesday should show modest increases, reversing a downward trend over the past three months, economists said.

Investors in bank stocks had been shaken after Wells Fargo & Co. …

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