In a sign of how hot the New Jersey bank merger market has become, investors Thursday shrugged off the agreement by National Westminster Bank PLC to pay an estimated 2.4 times stated book value for Freehold-based Central Jersey Bancorp. (See related story on page 1.)

"I don't think this changes the lay of the land that much," said Thomas J. Romano, an analyst at McConnell, Budd & Downes Inc., Morristown N.J.

Big Gains Don't Materialize

The expected surges in the price of stock in other presumed acquistion targets in the state following the announcement of the $300 million deal Thursday morning, failed to materialize.

Summit Bancorp gained 12.5 cents to $21.625; Midlantic Corp. was unchanged at $29.25; and UJB Financial Corp. gained 25 cents to $27.625.

Any lift from the announcement was partly offset by a downturn in the bond market that appeared to drag down many bank issues along with the Dow Jones industrial average, which fell 40.47 points to 3,626.58.

Worthen Falls on Rumor

Similarly, widespread rumors that Worthen Banking Corp. in Little Rock is about to be acquired by a St. Louis bank failed to push its stock into positive territory. Worthen stock was off 37.5 cents at $29.125.

New Jersey analysts said another reason for the seeming indifference to the Natwest merger was that a 239% premium has become unremarkable.

Elizabeth A. Summers, banking analyst for Ryan, Beck & Co., West Orange, said Natwest agreed to paid an even higher premium for Citizens First Bancorp of Glen Rock, in a deal announced earlier this year.

On Block Since Late '93

Banks outside New Jersey have commanded similar premiums recently, Ms. Summers added.

Central Jersey had been rumored to be on the block ever since the fourth quarter, when it cleaned up its balance sheet through a bulk sale of real estate assets.

Payment Partly in ADRs

Its stock has rallied on merger speculation several times, with the most recent surge starting after June 21, when it closed at $26.50. Central Jersey shares were unchanged Thursday at $33.

The acquisition price equals $33.50 a share.

What's interesting about the two Natwest deals, Ms. Summers said, is that a portion of the payment to shareholders will be in the form of American depositary receipts based on National Westminster shares traded in the United Kingdom.

Ms. Summers said the tactic exempts sellers from a capital gains tax, but makes the deals more difficult to analyze.

British interest rates and currency exchange rates become a factor in evaluating the transaction.

Exchange Rate to Vary

She pointed out that in the earlier deal, a fixed exchange ratio could result in a wide difference in the value of the stock versus the value of the cash by the time the transaction is closed.

In the new deal, the exchange ratio will vary in order to keep the values within a 10% range.

Although the acquisition removes one of only a handful of substantial franchises available in New Jersey, "everyone in the market continues to be a in play," said Mr. Romano of McConnell Budd. He added that First Fidelity Bancorp. was probably an exception to that rule.

In-State Consolidation

Out-of-state banks such as Chemical Banking Corp., Mellon Bank Corp., and Nations-Bank Corp. are thought to be eager to build presences in the Garden State.

But Ms. Summers said the Natwest acquisition represents in-state consolidation, since the company already has a substantial New Jersey franchise, to which it is adding market share in the northern and central parts of the state.

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