Newspaper article THE JOURNAL RECORD

Some Bank Stocks Rise on Takeover Rumors

Newspaper article THE JOURNAL RECORD

Some Bank Stocks Rise on Takeover Rumors

Article excerpt

Associated Press

NEW YORK _ Takeover rumors are sweeping through the banking industry, pushing up share prices of several large banks around the country.

New laws allowing banks to branch across state lines, overall weakness in bank stock prices and a cash glut at many banks have fanned the rumor flames.

Shares of Shawmut National Corp., a banking company based in Hartford, Conn., rose 7.5 percent on Wednesday on rumors of a takeover. Talk centered around an acquisition by Bank of New York Co. Inc. or Bank of Boston Corp.

Shawmut's shares closed at $21.87, up 25 cents Thursday on the New York Stock Exchange.

Shares of First Fidelity Bancorp., New Jersey's largest bank, shot up last month on takeover rumblings. Rumors circulated that the bank was holding merger talks with NationsBank, a Charlotte, N.C. company and the nation's third largest bank.

First Fidelity's shares are up 8 percent since early December and closed at $48.50 Thursday, down 50 cents.

NationsBank filed documents with the Securities and Exchange Commission revealing plans to sell $3 billion in debt and stock to raise money, prompting speculation that the company may buy another bank.

NationsBanks said in the filing that the proceeds would be used for general corporate purposes.

The company's shares closed 37 cents higher at $46.50 Thursday.

All the banks declined through spokesmen to comment.

Discussions about possible bank takeovers are going on all the time. The banking industry has been consolidating over the last several years as competition and slow revenue growth has forced many institutions to join forces to survive and become stronger.

Several small and medium-size bank mergers and acquisitions have taken place in recent months. Banks have been gobbling up mortgage companies, money management firms and processing businesses in an effort to diversify their mix of services. …

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