Responding to a report that it has been in merger talks with Union Planters Corp., Republic Banking Corp. acknowledged Wednesday it was in discussions "regarding a potential business combination."
A Republic spokesman declined to elaborate on the announcement, in which the $1.5 billion asset bank said it had hired investment adviser Keefe, Bruyette & Woods.
The Miami Herald reported Wednesday that Republic has been in negotiations to sell to Union Planters Corp. of Memphis since last year.
"Its been pretty well-known in Miami that Union Planters has been courting them," said Kenneth H. Thomas, a Miami bank consultant. Mr. Thomas said Republic could fetch $20 per share, which would make the deal worth about $426 million.
Shares of Republic rose 12.5 cents, to $17.50. Mr. Thomas said members of the Isaias family of Ecuador, who own a majority of Republic's shares, may be motivated to sell by financial difficulties they face at home.
The deal would boost Union Planters' growing presence in Florida. Last year, the acquisitive company announced plans to buy Ready State Bank in Miami and 36 Florida branches from two other banks. It also bought $2 billion-asset Capital Bancorp, Miami, in 1997.
A spokesman for Union Planters said the company does not comment on merger speculation.