Boatmen's Bancshares and Banc One Corp. made bids for Nebraska's Firstier Financial Corp., the American Banker has learned.

Sources said the two midwestern superregionals and a third unidentifed bidder competed to buy the $3.6 billion-asset bank, which earlier this week went to First Bank System Inc. for $700 million.

On the surface, the competitive bidding is merely further evidence of the wave of mergers that has hit banking. But analysts said the situation also spotlights the potholes that lie ahead on the road to industry consolidation.

Because Boatmen's itself is considered a candidate to be bought out, its effort to expand its franchise signals that some so-called targets may fight hard to preserve their identities.

More important, analysts said the failure of bids by two major players underscores a big problem for superregionals that hope to get in on the action: Their own stock prices are often too low compared with the prices of target companies.

"Firstier would have been a natural extension for Boatmen's, and Banc One was obviously interested because it agreed to the deal last year," said Stifel, Nicolaus & Co. analyst Joseph Stieven, referring to Banc One's aborted agreement to buy Firstier.

"Their stocks just did not have the horsepower," he said.

Though Banc One shares have recovered from the low level that prevented it from completing a deal for Firstier last year, they still trade at about 10 times estimated 1995 earnings. Boatmen's shares trade at 10.5 times earnings.

Firstier, meanwhile, has been trading at 11.9 times earnings.

Price-to-earnings multiples help measure the ability of a company to use its stock to make an acquisition, said Anthony Davis, an analyst with Dean Witter Reynolds. When a seller's stock price is higher, the buyer's ability to afford deals without meaningful earnings dilution is reduced, he said.

And he noted that the problem is hardly unique to Banc One and Boatmen's.

According to a Dean Witter analysis, the price-to-earnings multiples of regional banks that might be seen as targets are 14% higher on average than the P/E ratios of superregionals.

Banks like NationsBank Corp. and BankAmerica Corp. will have a particularly hard time entering the consolidation fray.

Both banks are expected to have P/Es next year below eight times earnings, which would mean their stock would trade at a 20% discount to the average regional bank stock, Mr. Davis said.

Banc One is expected to have a P/E of 9.4 next year, while the regional bank composite is expected to average a P/E of 10, according to Salomon Brothers Inc.

"Mr. Boardman doesn't have the currency he needs despite his lob at Bank of Boston," Mr. Davis said, referring to Banc One's head of mergers and acquisitions and the bank's brief bid for Bank of Boston last month.

Boatmen's interest indicates that the bank, at least for now, is not looking to its own sale or merger, as some observers have speculated. However, expansion into Nebraska now is not necessarily inconsistent with an eventual sale of the entire company, Mr. Davis said.

Sources also indicated that convincing Firstier's management and board of directors to accept the $38 per share bid, $1 less than the day-before stock price, was not easy. In fact, the deal almost fell apart.

Firstier's stock had run up so high on takeover speculation that the price easily outstripped the actual market value, which the source said was estimated to $32 a share.

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