Shawmut Stock Drops on Report Of Merger Talk
Stock in Shawmut National Corp. took a dive Wednesday after a published report that the bank had discussed the possibility of a merger with Bank of Boston Corp.
Shawmut's shares closed at $5, down $1.
The Wall Street Journal reported that Shawmut had held "very preliminary" merger discussions with Bank of Boston. The newspaper also reported that Chase Manhattan Corp. and Bank of New York Co. had discussed buying a major stake in Shawmut but that talks had collapsed.
Shawmut declined to comment, as did Chase and Bank of New York. But James Moynihan, an analyst for Advest Inc. in Boston, said he had visited with Shawmut officials Tuesday and they "outright denied having any discussions with Bank of New York and Chase."
Analysts said a merger between Bank of Boston and the ailing Shawmut is unlikely without federal assistance. "The ability of those two companies to merge in their current weakened conditions is just about impossible," Mr. Moynihan said.