United States commercial banks are unlikely to buy the assets of the failed British investment bank, Barings PLC, banking analysts said.
Bankers Trust New York Corp. and J.P. Morgan & Co. have been mentioned as possible buyers of Barings' assets, which are being shopped to financial firms by Ernst & Young, the court-appointed administrator in a bankruptcy process similar to Chapter 11.
Barings, which operated a brokerage, an asset management firm, and a corporate finance business, failed over the weekend after a single company trader in Singapore caused more than $1 billion of losses.
Analysts said that foreign banks are more likely than Morgan or Bankers Trust to snap up the businesses. They identified National Westminster Bank PLC as the leading candidate, followed by ABN Amro Holding, Morgan Stanley & Co., Merrill Lynch & Co., Union Bank of Switzerland, and HSBC Holdings.
Barings' businesses might fit well with the strategies of J.P. Morgan and Bankers Trust, but the two U.S. banks do not have acquisitive cultures, said Rafael Soifer, an analyst with Brown Brothers Harriman & Co.
Both banks have grown through hiring, not purchases, he said. J.P. Morgan has not made a significant acquisition since 1959, and Bankers Trust, which is reported to have reviewed Barings' books over the weekend, has made few acquisitions of late, he said.
The asset management unit is the most prized of Barings' businesses, and should attract upwards of $750 million, said John D. Leonard of Salomon Brothers' London office. The brokerage and corporate finance units together will likely get less than that, he added.
"Bankers Trust and J.P. Morgan could handle the price, and Barings' asset management business would fit nicely into their operations," said Gerard Smith, director of financial institutions mergers and acquisitions at Salomon Brothers.
But Mr. Soifer said that "the chances are good that all of Barings will wind up going to foreign buyers.
"If a U.S. buyer does figure," he added, "it will likely be an investment bank like Morgan Stanley, rather than a J.P. Morgan."