SAN FRANCISCO - A prominent Wall Street analyst has concluded that a schism has developed in BankAmerica Corp.'s top management, with retiring chief executive Richard M. Rosenberg much more interested in big mergers than are other senior executives.
Thomas K. Brown, a New York-based analyst with Donaldson, Lufkin & Jenrette Securities Corp., said that recent discussions he has had with Mr. Rosenberg have convinced him that the banker is an avid advocate of big mergers - even at the relatively high prices currently being paid.
Furthermore, Mr. Brown said, he now believes that Mr. Rosenberg spentmuch of the summer unsuccessfully trying to put a blockbuster deal together.
The companies he thinks BankAmerica held at least initial talks with include NationsBank Corp., Chase Manhattan Corp., Bank of Boston Corp., and Barnett Banks Inc.
The analyst added, however, that Mr. Rosenberg did not specifically tell him about any merger talks.
Mr. Brown said he believes that BankAmerica's other senior executives - including president David A. Coulter, who is scheduled to succeed Mr. Rosenberg as chief executive in January - hold more conservative views and don't favor big mergers at current prices.
"It appears to me that members of BofA's senior management have different opinions about what BofA is willing to pay for one of these transactions," Mr. Brown said.
Another executive who Mr. Brown believes has a more cautious view towards mergers is chief financial officer Lewis W. Coleman, who is also a vice chairman and a board member.
Mr. Brown, who has been a high-profile critic of many recent megamergers, said he believes it is unlikely that BankAmerica will enter into a blockbuster merger anytime soon, since Mr. Rosenberg is stepping down. But Mr. Brown added that he was surprised by the avid interest in mergers that Mr. Rosenberg expressed.
Mr. Brown said his discovery of Mr. Rosenberg's merger appetite has changed his view of the company.
"He truly believes in economies of scale and would like to do a sizable transaction," Mr. Brown said. As a result, he said, "in the back of my mind I'm more fearful" that a big merger will occur than he was six months ago. "In retrospect, I should have been more fearful then."
BankAmerica spokesman Peter Magnani said the company, as a matter of policy, could not respond to Mr. Brown's comments.
Knowledgeable sources, who spoke on the condition that they not be named, had mixed reactions to Mr. Brown's analysis.
Some said they thought it made sense. But another source said he thought the conclusions were off base. He said he did not believe that BankAmerica was now engaged in serious merger talks or had been over the summer.
Bank of America this week announced a partnership with Lehman Brothers Inc. to run a short-term financing fund for leveraged acquisitions, recapitalizations, and managed buyouts.
The so-called Strategic Resource Partners fund will have at its disposal more than $600 million in capital, the companies said, including contributions of $150 million each from Bank of America and Lehman Brothers.
The fund intends to provide interim or "bridge" financings that would be replaced with longer-term funds from publicly traded high-yield securities or private placements.
