Magazine article American Banker

Market Signals NYC Thrift Deal Frenzy after Dime Bid

Magazine article American Banker

Market Signals NYC Thrift Deal Frenzy after Dime Bid

Article excerpt

North Fork Bancorp's $1.88 billion hostile bid for Dime Bancorp Monday could galvanize the thrift mergers and acquisitions market in the New York metropolitan area, analysts and investors said.

They said North Fork's chief executive officer John A. Kanas is likely to prevail in his attempt to block Dime's pending merger with Hudson United of Mahwah, N.J., and force Dime to merge with North Fork. That, they said, would set the stage for a long-awaited consolidation in the local thrift market.

"We believe that Mr. Kanas will bust the deal, and it will be the first shot over the bow" in a series of New York thrift deals, said Gerard Cassidy, an analyst at Tucker Anthony Cleary Gull in Portland, Maine.

Shares of Hudson United Corp., Greenpoint Financial Corp., Roslyn Bancorp, and Astoria Financial Corp. shrugged off a downdraft in the market, as investors concluded they could soon be merger targets.

"Anytime you have a big deal that changes the landscape, then it tends to force everyone around to assess where they are and where they want to be," said Kevin T. Timmons, an analyst at First Albany Corp.

The deal would solidify North Fork's position as a buyer and lure big banking companies that already have a presence in New York -- such as Citigroup Inc., Chase Manhattan Corp., ABN Amro Holding, and HSBC Holdings PLC -- into the buying mode, analysts said.

If North Fork is successful, it could also put a damper on the mergers of equals like the Dime-Hudson deal, they said.

Hudson United and Dime announced their $3.6 billion deal last September, touching off a firestorm of protest among Dime shareholders who were angered that a premium was not offered for their shares.

The discontent among shareholders and steadily sinking thrift stocks and price earnings ratios was impetus for Mr. Kanas, the acquisitive chief executive officer of North Fork Bancorp to make a bid for Dime. …

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