A Wall Street analyst is angry that National City Corp. has canceled a share buyback plan announced last month.

National City had said it would buy back 10 million shares of its stock, but rescinded the plan after it agreed to purchase First of America Bank Corp. Under Securities and Exchange Commission rules, National City, which hopes to account for the acquisition as a "pooling of interest," has to stop any stock repurchase.

Michael Mayo of Credit Suisse First Boston calls the on-again, off-again buyback "one of the most egregious acts of the year."

Mr. Mayo said that if National City knew it was going to make a large acquisition, it should never have announced a buyback plan. Some investors, he said, bought National City's stock on the basis of that announcement.

"Clearly there's a perception the buyback occurred during the negotiations (for First of America), which if true doesn't seem like an appropriate action," Mr. Mayo said.

Thomas Richlovsky, National City's treasurer, called Mr. Mayo's assertions "a little melodramatic."

Certainly, National City took into consideration that it might have to rescind the repurchase plan, he said. But when the plan was announced, he said, the company did not know how fast the First of America deal would come together.

National City's board approved the buyback at a meeting on Monday, Nov. 24, three days after it heard that First of America would take bids. On Wednesday, Nov. 26, the First of America negotiations went into fast- forward, Mr. Richlovsky said. "The Wednesday before Thanksgiving, we were advised (that) if we could move quickly it would be to our advantage," he added.

The deal was finalized over the weekend and announced the following Monday.

National City had consulted its lawyers before announcing the buyback plan, to make sure it was appropriate given that the bank was considering a deal, Mr. Richlovsky said. Since negotiations with First of America had not officially begun, the lawyers approved the repurchase plan.

Legally, National City would be culpable only if it knew when the plan was announced that it had won the bidding for First of America, said Daniel O'Rourke, a lawyer with Vedder, Price, Kaufman & Kammholz in Chicago. It was unlikely National City knew that a week before the deal was announced, he said.

Other analysts said National City acted appropriately. "You go on with your business until you cut a deal," said James Schutz, an analyst with ABN Amro Chicago Corp.

Analyst Joseph Duwan of Keefe, Bruyette & Woods Inc. said he believes the First of America deal developed quickly but the repurchase plan had been on the National City directors' agenda for some time.

In the end National City bought back some shares, but Mr. Richlovsky declined to say how many.

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