Rumors that Fleet Financial Group might be acquired by NationsBank Corp. prompted Fleet shares to surge $1.375 to $33.875 in heavy trading despite a sharp selloff in the stock market.
Dan Dorfman of CNBC, a business news cable television channel, said First Boston Corp. banking analyst Thomas Hanley had "informed his sales force" of the possible deal and was "gung ho" about it.
Both banks declined to comment about the rumors.
NationsBank is based in Charlotte, N.C. and has assets of $122.8 billion. Fleet is located in Providence, R.I., and holds assets of $45.3 billion.
Deal Called |Double'
Asked later by American Banker about such a deal, Mr. Hanley said it is "double" despite the apparent restrictions of the southeastern compact. The compact effectively restricts southeastern banks to acquisitions within their region.
Others were skeptical. "It will be difficult to exit the Southern Compact if you operate in multiple states," said Dennis Shea of Morgan Stanley & Co. "It will have to be changed or refuted in every state."
Mr. Dorfman said NationsBank is "dying to break out of the Southeast." NationsBank's shares were down 87.5 cents to $48.875 in late trading.
He said Mr. Hanley had put the takeover price of Fleet at $40 a share, which would make it a $5.5 billion deal.
Mr. Dorfman said a deal for Fleet would give NationsBank a large position in the New England states. Fleet also is a significant player in New York State, with offices in New York City.
Mr. Dorfman also said such a deal would give NationsBank a "major entry" into mortgage banking. Fleet has mortgage banking operations in 42 states.
Elsewhere on Wall Street, the rumors appear to be taken in stride. "This happens to undervalued stocks, and Fleet is undervalued," said Michael L. Mayo of UBS Securities Corp.
