Shares of embattled Michigan National Corp. plunged Monday after management doused takeover speculation by announcing that its Dutch tender offer had been oversubscribed - and that more shares may be repurchased.

The company said it would repurchase 2.166 million shares, or 14% of all shares outstanding, at $78 a share. That was at the low end of the $78-to-$90 range the $9.2 billion-asset bank had announced Nov. 3.

As a result, purchase of the troubled company is less likely because of Financial Accounting Standards Board guidelines that severely limit the use of repurchased shares in a stock swap.

Analysts noted, however, that some of the most vocal dissident shareholders who have been calling for sale of the bank aren't likely to go away. "The reason management did the Dutch auction was to perpetuate themselves in office," said Michael Diana of Bear, Stearns & Co. "But the whole Dutch auction and the results don't change anything. There will be a proxy fight, they will lose it, and the company will be sold."

Indeed, Heine Securities Inc., which owns 5.6% of the company's shares and has been one of the main advocates of the sale, did not tender any shares. The group thus remains a thorn in management's side.

And last late last month, former chairman Stanford C. "Bud" Stoddard, who owns more than 6% of the company, requested that a letter be inserted into next year's proxy statement calling for the sale of the company.

Repurchased shares can always be "detainted" for a pooling by reissuing new shares, Mr. Diana said.

But the company's current chairman and CEO, Robert J. Mylod declared the tender offer's results an unqualified success for the company, and said more shares would likely be repurchased in the near future. "We are delighted" with the offer, he said. "We accomplished everything we set out to accomplish when we announced it."

Excess capital was shed and return on equity will rise, he said. And the company will likely buy back more shares in the future, he said, because there is another $25 million of excess capital left from the tender offer.

The company had budgeted $200 million in early November, but only $175 million was spent to buy back the shares and 294,847 cancelable mandatory stock purchase contracts because of the low strike price, he said.

One analyst calculated the company had far more capital to shed, estimating Mr. Mylod would spend $125 million more on stock repurchase. Mr. Mylod also emphasized efforts to trim costs, predicting that the company would save $85 million in pretax profits through next year.

And he reemphasized efforts to shed all company units except the Michigan banking business.

Normally all this would boost a company's share price, but Michigan National's stock which was off by as much as $2.50, closed down 75 cents at $74.50.

The tender offer and takeover speculation had kept this stock afloat, but now both are gone, said Scott Edgar, an analyst with SIFE Trust Fund, which invests, in banks and owns 60,000 Michigan National shares. Equity analyst Fred A. Cummings of McDonald & Co. said the stock could reach the low $60 range by the end of next year.

The high degree of interest in the offer indicated that many shareholders felt $78 was the best price they would get, Mr. Cummings said.

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