Shares of Amegy Bancorp. Inc. jumped more than 10% Tuesday on talk that the Houston company was actively seeking to sell itself.
Most analysts say Compass Bancshares Inc. is the favorite among a group of potential buyers also said to include Wachovia Corp., Citigroup Inc., and Zions Bancorp.
Christopher Marinac of FIG Partners LLC said Amegy was rumored to be exploring its options, and he wrote in a research note issued Monday that there was speculation that negotiations between Amegy and Compass were "well under way."
Mr. Marinac said in a telephone interview Tuesday that he would expect the $7.6 billion-asset Amegy to fetch $1.6 billion, or $23 a share.
The chatter has pushed Amegy's stock up by nearly 20% since Friday. It closed up 10.39% Tuesday.
The $28.8 billion-asset Compass, of Birmingham, Ala., could do a "reverse merger," Mr. Marinac said in the interview, with Amegy chief executive Paul B. Murphy Jr., 45, succeeding the 62-year-old D. Paul Jones Jr., the chairman and CEO at Compass. Compass does not have a succession plan, Mr. Marinac noted.
Amegy spokesman Darren Craig said the company had seen Mr. Marinac's report, "but we don't comment on speculation."
Compass spokesman Ed Bilek and Mary Eshet, a spokeswoman for the $506 billion-asset Wachovia, said their companies do not discuss merger speculation. A spokeswoman for the $1.5 trillion-asset Citigroup also declined to comment, and calls to the $31.8 billion-asset Zions, of Salt Lake City, were not returned by press time.
Sandler O'Neill & Partners LP analyst Kevin Fitzsimmons said an Amegy-Compass combination would make sense if Compass could buy at a "very modest premium." (The $23-a-share price that Mr. Marinac said Amegy could get would be a 20% premium to Friday's closing price.)
Compass would get much stronger in Texas, and would probably move its headquarters to Houston, Mr. Fitzsimmons said.
Amegy, which changed its name from Southwest Bancorp of Texas last month, has $4.3 billion of deposits in Texas, where it has all of its 75 branches. Texas is Compass' largest market; it has 139 branches and more than $7 billion of deposits there, according to the most recently available FDIC data.
"In the short term you really boost your franchise," Mr. Fitzsimmons said. "Longer term, it would be viewed that - in a few years - that this franchise would be a lot more attractive when the time comes for it to be sold."
Mr. Fitzsimmons said Compass would have an advantage in an all-stock deal, given its strong multiple. But he said a larger company such as Wachovia or Citi could improve its chances by including cash in a buyout offer.
Analysts said Compass has frequently been seen as an acquisition target because of its strength in the Southeast and the Sun Belt and because of Mr. Jones' age.
Wachovia, which bought SouthTrust Corp. of Birmingham last year, was said to be interested in Amegy before agreeing to buy SouthTrust. But analysts said it appeared Amegy spurned the Charlotte company.
Amegy spent $278 million in three acquisitions in the last two years, continuing an initiative to become a statewide corporate lender and retail bank. But integrating those acquisitions has become a cost concern, and the company has had margin pressures.
Mr. Marinac said it seems Amegy has gotten past those issues and does not need to sell.
John Reosti contributed to this story.
