Magazine article American Banker

Trickle of Deals Unlikely to Spell End of Drought

Magazine article American Banker

Trickle of Deals Unlikely to Spell End of Drought

Article excerpt

A flurry of deals, including one announced Monday by M&T Bank Corp. of Buffalo and one by Wells Fargo & Co. last week, did not convince experts that bank M&A will perk up. Low stock prices and a market that continues to throw cold water on many deals are the biggest hurdles, analysts said. Sellers also continue to hold out for higher prices, merger experts said. "There will be a trickling of smaller transactions," said Michael Mayo, an analyst at Credit Suisse First Boston. "There may be some larger deals later in the year, but it will likely be at a subdued pace." M&T Bank said Monday that it would acquire Premier National Bancorp of Lagrangeville, N.Y., for $342 million. (See story, page 1.) In May, M&T reached a deal to buy Keystone Financial Inc. of Harrisburg, Pa., for $1 billion. Wells Fargo said last Friday it would buy Brenton Banks Inc. for $265 million in stock. Last month U.S. Bancorp said that it would buy Scripps Financial Corp. for $155 million. Still, none of those deals are large enough to get mergers and acquisitions going, analysts said. "M&T's deal is not a watershed event," Mr. Mayo said. Denis LaPlante, an analyst at Fox-Pitt, Kelton in New York, said that none of the deals this year have been big enough to trigger momentum. In the first half of last year there were 15 deals in which the target companies had at least $1 billion of assets. This year there have been only nine, Mr. LaPlante said. "I see more deals in the second half of the year but below the annual average" of 28 deals over the last decade, he said. …

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