Illustrating the perils of a seller's market, Fourth Financial Corp. said its acquisition of Great Southern Bancorp -- its largest planned deal -- collapsed in a dispute over the final price.

The announcement Wednesday is a setback for Wichita-based Fourth, which planned to use the $534 million-asset Springfield, Mo.-based thrift as a beachhead to expand into a third state.

In a tersely worded statement, Fourth Financial Chairman Darrel Knudson said he regretted that the deal was off. "We firmly believe that a merger can only be successful if both parties are eager to make it succeed," he said.

Meanwhile, William V. Turner, chairman and chief executive of Great southern, said in an interview that "since last summer our profits are up. We've had an outstanding year."

Strong profitability raised the book value of the company about $10 million over the last year, decreasing the proposed $87.6 million purchase price to about 1.35 times book. It was originally valued at 1.7 times book.

"We believed that was the right price to pay for the company," said William J. Rainey, executive vice president and general counsel at Fourth which stuck to its original offer to exchange 2.8 million shares for Great Southern's outstanding common stock.

Oberservers agree that the offer was devalued by a slight fall off in Fourth's stock price, but most significantly by strong profits at the thrift.

"Their performance has really been strong since the deal was announced," said Steven Schroll, banking analyst at Piper, Jaffray & Co. in Minneapolis. "I think they could look around and see that it's more of a seller's market than it was 12 months ago."

Green Southern Seen as Target

Analysts say that with a return on assets of nearly 1.7% and its poition in fast-growing south-western Missouri, Great southern could be a target for acquirers in Arkansas, Oklahoma, or St. Louis. Ironically, the original deal for Great Southern drew skepticism from anlaysts and investors who questioned the premium for a thrift franchise.

For Fourth Financial, which has $7.5 billion in assets, the announcement is its first major setback after three years of rapid expansion.

"I think this is a temporary setback for them and a month from now it will be old news," said Joseph Stieven, senior banking analyst at Stifel, Nicolaus & Co. "There are other well run, independent institutions on the west side of the state that Fourth could buy."

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