Nine Massachusetts community banks are teaming up to bid on 10% of Fleet Financial Corp.'s expected castoffs.
Boston-based Fleet plans to divest about 270 branches and $12 billion of deposits in order to win approval for its $16 billion acquisition of BankBoston Corp.
The bulk of the branches is expected to go to a large, out-of-state bank, but the nine small banks formed a consortium to bid on roughly 25 branches across the state with about $1.2 billion of deposits.
"We think that with a joint bid, we'll have a little more strength," said John F. Murphy, president and chief executive officer at Bay State Bancorp in Brookline.
Bay State, with $350 million of assets, is the only institution to publicly announce that it has joined the New England Bank Acquisition Consortium. The eight other banks are scattered throughout Massachusetts with assets ranging from less than $100 million to about $1.5 billion, said Edward Shea, a Natick, Mass., consultant who created the consortium.
In recent weeks, public officials have called on large, out-of-market banks to bid on the divestitures so Fleet would have some competition for large loans.
Bids are due next week. Fleet is expected to name the winners in August, according to a company spokesman.
If Fleet does not accept the consortium's bid, Mr. Shea said his group is prepared to make an offer to the company-or companies-Fleet selects.
Two recently announced mergers may have improved the consortium's chances. Peoples Heritage Financial Group in Portland, Maine, said its interest in the divestitures has "diminished" now that it is buying Banknorth Group Inc. of Burlington, Vt.
Likewise for Citizens Financial Group in Providence, R.I., which this week unveiled a deal to buy UST Corp. in Boston. UST, with $5.9 billion of assets, was also considered a front-runner.