Mark Twain Bancshares said Monday that it was in merger negotiations, prompting widespread speculation that it was about to be acquired by First Bank System Inc.

No deal had been announced by the close of trading, but Mark Twain shares gained $2.875 to close at a 52-week high of $37.875 after the St. Louis bank notified the National Association of Securities Dealers that it "has been in negotiations with respect to a possible strategic merger."

Analysts, lawyers, bankers, and investors said they believed a deal with Minneapolis-based First Bank System was imminent. They pegged the likely price at about $670 million.

Some observers speculated that deal was delayed Monday because of a run- up in First Bank System's stock. The shares soared $1.625, to $51.875, apparently because they became part of the Standard & Poor's 500 index at the opening of trading.

Chicago Corp. analyst Christine Pavel cautioned that a deal by First Bank System would depend on revenue enhancement rather than cost cutting, and as such would be a departure from the norm for First Bank. She listed Fifth Third Bancorp and Norwest Corp. as other possible acquirers of Mark Twain.

The deal would mark one of the first major forays into Missouri by an out-of-state bank.

"If this happens, it is open season the Missouri preserve," said Joseph Stieven, a bank analyst with Stifel, Nicolaus & Co., St. Louis. "Missouri did not have interstate banking until it was forced upon it, and now you are having open season on it."

Spokesmen for First Bank System and Mark Twain would not comment.

Only one other out-of-state bank has entered Missouri with a large acquisition since federal interstate branching powers were approved last year. This summer, Union Planters Corp. agreed to buy $1.1 billion-asset Capital Bancorp. Mark Twain has $2.8 billion of assets.

Michael Stead, a portfolio manager for Sife Trust Fund, said he had heard the deal would pay $42 a share for Mark Twain. That would exceed 255% of book and equal 14 times next year's earnings for the bank, he said.

Mark Twain's performance would justify the fat price, said Mr. Stieven. Its return on equity was 18.4% in the third quarter, compared with a regional average of 14.2%, he said.

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