American Savings Has Broken Off Talks
American Savings of Florida says it has broken off merger discussions and is reviewing its "strategic alternatives."
The Miami-based thrift, which has $3.5 billion of assets, said it had "determined not to pursue the sale transaction under consideration" that it had announced last Thursday.
The company declined to identify whom it had been negotiating with, but a source close to .the situation said it was First Union Corp.
The Charlotte, N.C.-based superregional declined comment Wednesday.
Analysts surmised that the' recent decline in bank stocks had made it more difficult for a potential acquirer to provide American Savings with its desired takeout premium.
"I don't think the offers are as aggressive as they were six months ago," said Benjamin Bishop Jr., with Allen C. Ewing & Co.
On Tuesday, when American Savings announced the collapse of merger talks, its stock plunged $3.375 to $16.625 a share on voIume of 1.8 million shares. Last Friday, at the height of acquisition speculation, American Savings had closed at $21.50 a share.
American Savings had been put into play because its 49% owner, the bankruptcy trustee administering the assets of principal owner Enstar Group Inc., is required to sell his entire stake by June 1, 1995.
On Tuesday, American Savings said it was considering alternafives to a sale, such as "reorganization, recapitalization, consolidation or other corporate transactions involving Enstar Group and/or American Savings, including the potential repurchase by American Savings of some or all of Enstar Group's shares."
"The easiest thing for them to do is sell the company. I think it's a matter of price," said Deborah R. Beylus, with JW Charles/CSG in Boca Raton.
Ms. Beylus said she believes American Savings will again be a takeover target once its stock falls to about $15 a share,.
American Savings reported third-quarter earnings of $5.3 million, flat from the year-earlier period.