Mark Twain Bancshares said Tuesday it had ended merger talks, one day after disclosing to the market it was in negotiations with an unidentifed suitor.
Shares of the St. Louis-based bank plunged on the news, falling $2.375, to $35.50.
Mark Twain was widely rumored to be negotiating with First Bank System Inc., which would not comment. One market source said the merger partner was First Bank's Minneapolis rival Norwest Corp., which also declined to comment.
Mark Twain said it was unable to reach agreement on terms of the deal. Because Mark Twain is trading at 231% of book value, any deal would be pricey for an acquirer, analysts pointed out.
Last November, Mark Twain chairman Alan Siteman told an investors conference the bank had been in touch with several large acquirers. Given its disclosure on Monday, analysts said Mark Twain is clearly for sale.
"This pretty much puts them in play," said Thomas Maier, a bank analyst with Kemper Securities in Chicago. "While the bank could remain independent for a while because of its strong earnings, longer term, companies in this size range will have a difficult time surviving."
Mark Twain has $2.8 billion of assets. The deal was reported to approach $42 a share, or $672 million.