Hibernia Rises on Word of Talks with NCNB
Hibernia Corp. stock rallied strongly Monday on reports that the company was discussing a takeover offer or a capital infusion from NCNB Corp.
In late trading, the common stock of New Orleans-based Hibernia had climbed 17%, or $75 cents a share, to $5.125. Hibernia common shares had a book value of $11.20 at March 31. The stock of NCNB, based in Charlotte, N.C., was down 12.5 cents, to $34.25.
Doubts Linger About NCNB's Intentions
The Hibernia rally could have been stronger if not for investor uncertainty about the company's value and doubts about what kind of offer NCNB might make, analysts said. Hibernia lost almost $50 million in the first quarter and expects to release second-quarter results today.
As previously reported, Hibernia officials kept open the possibility they would sell the company's Texas subsidiary, which has $1.1 billion of assets in 25 banking offices. NCNB's interest may extend only to that franchise, which would augment its own Texas unit.
A second option would be a stakeout agreement in which NCNB infuses capital into Hibernia in exchange for a later option to buy the company at a capped price.
A third option would be for NCNB to buy Hibernia outright.