St. Paul's Stock Drops; Thrift Mum on Rumor of Buyout Offer from Amro

No news is bad news for St. Paul Bancorp's stock.

After riding to a 52-week high of nearly $26 last Friday on rumored takeover talks, the Chicago company's stock this week fell because a deal has not materialized.

The $4.1 billion-asset St. Paul, which is Illinois' largest independent thrift, reportedly has been talking with Amsterdam-based ABN Amro. ABN is said to be offering $30 a share for the thrift.

A spokeswoman for St. Paul wouldn't comment on the rumors.

After rising for several days, St. Paul's stock peaked at $25 3/4 last Friday, up 44% since the beginning of the year. But with no acquisition news, the stock was trading at $23.50 late on Wednesday.

Byron Aldridge, chief investment officer with Houston-based Jenswold King & Associates, which holds 550,000 shares of St. Paul, reportedly confirmed that St. Paul was in negotiations to be acquired and may be negotiating with ABN Amro.

Reached at his office, Mr. Aldridge declined to comment.

"If you would've asked me last week on Wednesday or Thursday, I would've been leaning towards an imminent public announcement," said Wayne Bopp, a thrift analyst with Stifel, Nicolaus & Co., St. Louis.

Now, he's leaning toward no deal, in part because he learned that St. Paul chief executive Joseph Scully was out of town when the alleged acquisition team would have been at the thrift.

Furthermore, Mr. Bopp believes that St. Paul's heavy holdings in California real estate could deter ABN from completing the deal. The company was extremely concerned during its acquisition of Chicago's Cragin Federal Bank, which had fewer California real estate holdings than St. Paul.

Daniel Westrope, an analyst with Howe Barnes Investments Inc., Chicago, said interest in St. Paul's stock lasted long enough to substantiate rumors about negotiations.

"This wasn't just a one-day or part-of-a-day thing," he said. "That's unusual for an unfounded rumor."

An announcement still could be coming, he said.

St. Paul periodically has been the subject of similar rumors and in the past has issued statements dismissing them, he said. But he said the "no comment" strategy could just be a change in company policy.

Nonetheless, the thrift is an attractive acquisition candidate, analysts said.

Getting St. Paul's $4 billion in assets and 52 branches "makes you a meaningful player from day one," Mr. Westrope said.

St. Paul would fit with ABN Amro's previous Chicago thrift acquisitions of LaSalle Tallman Bank and Cragin Federal, he said.

It also could either be a good match for BankAmerica, which has a wholesale but no retail presence in Chicago with its recent acquisition of Continental Bank, or with First Bank System, which last year acquired Boulevard Bancorp, he said.

Another possible suitor could be Bank of Montreal, which recently acquired Harris Bancorp in Chicago, Mr. Bopp said.

Analysts predicted that the company's stock could sell for $30-plus per share in an acquisition.

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