Utah Group Challenges 1st Security - Zions Deal
SALT LAKE CITY - A group of Utah business owners has asked the Federal Reserve Board to reconsider its approval of the merger of First Security Corp. and Zions Bancorp.The coalition accused the regulator of miscalculating the market share of the combined entity and the effect that would have on competition.
"The Fed did not pay attention to accepted principles of antitrust law," said George M. Allen, the lawyer representing the coalition.
For example, Mr. Allen argued, the $650 million deposit divestiture that regulators required of the merging banks in the Salt Lake City market should have been closer to $1.2 billion. A host of other calculations and market share statistics were included with the petition for reconsideration, which was filed with the Fed on Monday.
Although the appeal is not expected to be granted, Mr. Allen said the motion will allow the new data and calculations to be included in a lawsuit filed Monday against the Fed by the Utah business coalition in the Tenth Circuit Court of Appeals in Denver. That suit aims to overturn the Fed's Dec. 13 order approving the deal between First Security and Zions.
Zions and First Security had been scheduled to close their merger by Friday but were forced to delay after the Securities and Exchange Commission last week required Zions to restate its financial results for the last three years. The SEC mandated that the banking company restate multiple acquisitions made during that time span as purchases, rather than poolings of interest. The deal is expected to close in the first quarter.
- Olaf de Senerpont Domis
Mich. Bank to Buy Corporate Trust Line
FARMINGTON HILLS, Mich. - Michigan National Corp. said Wednesday that it has a deal to buy the corporate trust business of Citizens Banking Corp. in Flint, Mich.Michigan National, a subsidiary of National Australia Bank Ltd. of Melbourne, will pay an undisclosed price for the business, which consists of bond trustee and paying agency services for corporate and municipal bond issuing customers.
Michigan National, which has $10.8 billion of assets, has been in the corporate trust business for 30 years and administers more than 2,000 relationships. It said it will start providing corporate trust services to Citizens customers on Jan. 1.
Sharry Smith, assistant vice president and trust officer at $4.9 billion-asset Citizens, said Michigan National has the size and the experience that her company needs to compete in offering corporate trusts.
"Our highest priority was to select a provider committed long term to this business, with the necessary expertise and a strong local presence," she said.
- Louis Whiteman
J.P. Morgan Seeks Stake In Italy-Based Lender
MILAN - J.P. Morgan & Co. has put in a bid for a stake in Credito Fondiario & Industriale SpA, a Rome-based corporate lender, according to news agency reports.In July, Banca Commerciale Italiana put the 51.7% of Credito Fondiario that it owns up for sale. J.P. Morgan executives were unavailable for comment on the reports that the New York banking company and Goldman, Sachs & Co. have submitted the highest offers, topping an offer by Morgan Stanley Dean Witter & Co.
Sources close to J.P. Morgan said any purchase of shares in Credito Fondiario would be part of a growing array of investments it has made in foreign financial institutions for its own account. They added that J.P. Morgan is also contemplating selling off the 12% stake it acquired in Bank Handlowy of Poland if the Polish government allows Handlowy to merge with BRE Bank.
- James R. Kraus