Shares of Bear, Stearns & Co. have surged on merger speculation this summer, with talk centering on the possibility that a big commercial bank might buy the New York investment bank.

Bear Stearns shares are up about 40% since July 12, when Paine Webber announced its $16 billion merger deal with UBS, touching off a round of merger talk about other investment banks. Some speculation centered on the possibility that UBS would cut a deal for Bear Stearns to add to its presence in the U.S. market, while others pegged Chase Manhattan Corp. as the likely buyer. Deutsche Bank AG has been mentioned a foreign bank looking to include another U.S. investment bank in its portfolio.

James Cayne, the chief executive of Bear Stearns, has helped kindle the talk by saying that the firm would be open to a deal. Some reports have valued the company at four times book value, which would put the price tag at $120 a share, or about $12.9 billion.

An article last weekend in Barron's, noting Bear Stearns' low rankings on some key league tables and its small number of private clients, cooled merger talk momentarily and sent the stock lower on Monday.

But a report in the New York Post that Mr. Cayne said he had been approached by a "huge" bank sent shares sharply higher in morning trading on Tuesday. Mr. Cayne emphasized that no negotiations were in progress.

The stock rose 81.25 cents Tuesday, or 1.37%, to close at $59.9375.

Analysts said they doubt that a deal is near. Michael J. Schroeder, senior vice president of the investment advisory firm Wasmer, Schroeder & Co. of Naples, Fla., said that the PaineWebber deal put pressure on Bear Stearns, but that he does not see a takeover soon.

"I am not aware of any reliable information as to what specific company would be interested," he said.

Lauren A. Smith, an analyst at Keefe, Bruyette & Woods Inc., said there is "no new news."

Analysts disagreed on which firm could be a suitable partner for Bear Stearns. Mr. Schroeder said he "wouldn't be surprised" to see Merrill Lynch and Donaldson, Lufkin & Jenrette bid for the firm as a way to expand their existing businesses. But Ms. Smith said that few U.S. investment firms could afford it, "and those who can don't need Bear Stearns."

Mr. Schroeder said a takeover would make more sense for Chase than for Citigroup. "Bear Stearns has attractive features for Chase," he said, citing its clearing and mortgage businesses, and its investment products practice.

He was skeptical about the idea of a foreign candidate buying Bear Stearns. "There is no shortage of banks that are interested in U.S. investment firms," but difficulties in combining two different cultures might prevent a foreign bank from jumping too fast on a U.S. company, he said.

An investor with a British presence, such as ING Barings, would have a slight advantage, Mr. Schroeder said.

But Ms. Smith said that Bear Stearns would give any foreign investor a strong entry. And James Mitchell of Putnam, Lovell, de Guardiola & Thornton Inc. said that, since PaineWebber is taken, there are not that many opportunities for foreign buyers to get into the U.S. market.

"The issue will come down to price" Ms. Smith said. Since shares are currently trading at twice book value, she questioned a sale at four times its book. "Is that a reasonable price? No!"

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