Merger speculation pushed American Residential Mortgage to a 52-week high at the close last Friday, reaching $24.75, up $1.25 for the week.
It has been widely rumored in the industry that the La Jolla, Calif.-based mortgage lender has attracted bids from several major commercial banks. NationsBank Corp. and especially Chase Manhattan Bank were said to be among the major bidders.
Sources last week indicated that a winner may emerge by the end of this week.
Officials at both Chase and Charlotte, N.C.-based NationsBank refused to comment.
Salomon Lends a Hand
In late June, with its shares languishing at about $17, American Residential Mortgage announced that it had hired Salomon Brothers to help find a buyer.
That announcement set off a round of speculation that continued through last week and sent the stock rocketing up more than 40%.
This comes despite a deteriorating originations picture at the big lender. American Residential's June mortgage originations were $496 million, down 40% from the same month in 1993.
The serious interest from Nationsbank and Chase Manhattan Bank surprised few in the industry.
Chase has been a bridesmaid in the bidding for more than one major mortgage property this year. The money-center was a serious contender in the Margaretten sweepstakes and was, along with NationsBank, one of the three finalists in the bidding for mortgage assets of U.S. National Bank of Oregon.
NationsBank is also seen as poised for a major acquisition. "The size of their mortgage franchise is just not in line with the size of that bank. They want to get big in a hurry," said one source close to the company.
Also, the recent hiring of Andrew D. Woodward Jr. to head NationsBank Mortgage is seen as a further indication that the. southern giant means business.
Fleet Unit Benefits
Mr. Wood.ward, formerly of Fleet Mortgage, has a long track record of assessing, acquiring, and integrating mortgage banking assets.
Fleet Mortgage, one of the few mortgage banks not widely rumored to be for sale, overcame that seemingly insurmountable problem and enjoyed a good trading week anyway. Shares of the Columbia, S.C.-based lender ended the week at $15.50, up 87.5% or about 6%.
Countrywide Credit Industries set a 52-week low of $12.875 before recovering to post a gain of 25 cents for the week. The closing price was $14.125.