Virtually all mergers and acquisitions in the banking industry have been done on friendly terms, but hints are growing that hostile takeovers could be less rare in the future.

So far most deals have been predicated on economic benefits to acquirers and targets alike, says J. Christopher Flowers, a partner at Goldman, Sachs & Co., New York.

But as these "make sense" deals dwindle, he says, hostile bids are almost certainly going to increase.

The most recent unfriendly move in banking was Wells Fargo & Co.'s pursuit of First Interstate Bancorp. The San Francisco and Los Angeles banks merged earlier this year

Such full-scale hostile takeover efforts will most likely continue to be rare, Mr. Flowers says, "but semi-hostile activity (by) dissident shareholders has increased."

Compared to most other industries, hostile activity in banking is still marginal, of course, but there are increasing signs of an industry bracing itself for less friendly mergers.

In one of the most interesting developments, Aon Risk Services, a subsidiary of Aon Corp., the Chicago-based international insurer, this month began marketing hostile-takeover and proxy-battle insurance to financial institutions.

The insurance, which Aon vice president Patrick Tatro says is the first of its kind, covers attorney fees and other costs incurred as a result of hostile activity. A policy can be purchased for a minimum of $22,500 annually, which cover costs up to $1 million.

"It compliments the poison pill," says Mr. Tatro, referring to a widely used takeover defense. "The idea is that the board has a war chest to explore all alternatives without considering the balance sheet."

No bank has purchased hostile-takeover insurance thus far. Mr. Tatro said he expects to target smaller banking companies, which have seen an upswing in proxy fights.

Indeed, the banking industry has had the highest occurence of proxy fights among all types of companies in 1995 and 1996, according to Institutional Shareholder Services.

Consolidation and the prospects for takeovers at attractive premium prices have given rise to more dissident shareholders particularly in smaller institutions, says Peter Gleason, senior analyst at the Bethesda, Md., consulting firm.

"Dissident shareholders point to premiums and higher multiples of other small banks that had been acquired by regionals and national banks," Mr. Gleason says. "These parties push the sale of the company because they feel the consolidation in the industry is just going to push their bank out of the business."

Mr. Gleason also pointed to the rise of the more-sophisticated shareholder, such at Genesis Financial Partners, a Newport Beach, Calif., hedge fund that has already waged two proxy fights in the last year and is in the midst of a third.

The fund has positions in four Northeast thrifts. Stephen Gordon, president of Genesis general partner Gen Fin Inc., said he doesn't believe it is engaged in hostile activity.

"There are only a few ways to generate equity and excess capital in the banking universe," said Mr. Gordon. "And sometimes the only way to generate the requisite return on equity is (to be acquired)."

Shareholder rights plans also have been on the rise in community institutions.

Shortly after it was the subject of takeover rumors, Reliance Bancorp, a $1 billion-asset Long Island thrift, armed itself with such a plan earlier this month.

Village Bancorp, an $175 million-asset banking company in Ridgefield, Conn., took similar measures on Tuesday.

"There was no specific threat to our company," said Village Bancorp president and chief executive Robert V. Macklin. "But we believe that Fairfield County is attractive to a lot of people; the shareholder rights plans was issued to prevent abusive tactics."

Mr. Macklin noted that seven other banks in Connecticut also have shareholder rights plans. "The number of independent banks has shrunk considerably over the last five years," said Mr. Macklin."The chance of hearing from someone will definitely will go up."

Others, however are skeptical that hostile activity increase in the industry.

"Hostile takeovers in the industry seem to come along every five years," said analyst Richard X. Bove of Raymond James & Associates, St. Petersburg, Fla. They are simply too costly and laborious to become common in banking, he says.

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